RiskTech Forum

ICE switches energy swaps to futures contracts

Posted: 19 October 2012  |  Source: FINCAD


IntercontinentalExchange (ICE) released a statement on October 16 announcing that it has changed all of its cleared OTC energy swaps to futures contracts. The change was motivated by client concerns regarding preparation for new derivatives regulation facing swaps contracts.

"We thank our customers for their support and cooperation during this transition and look forward to continuing to provide leading risk management services to global energy markets," ICE president and chief operating officer Chuck Vice said in the statement. "I am proud of the coordinated effort of our employees, trading participants, brokers, clearing members and vendors" to finish this change on a strict time frame and without suspending trading.

During the most recent weekend, all open interest in the bourse's cleared OTC energy derivatives was converted to identical futures contracts. As of October 15, all derivatives contracts involving North American natural gas, environmental products and electric power are currently listed futures on ICE Futures U.S. Alternatively, ICE Futures Europe lists all cleared products for oil, natural gas liquid, freight and iron ore.

After the transition, all derivatives products will still be cleared by ICE Clear Europe.