IntercontinentalExchange
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| Type | Public |
|---|---|
| Traded as | NYSE: ICE S&P 500 Component |
| Industry | Business services |
| Founded | 2000 |
| Headquarters | Atlanta, Georgia, The United States |
| Key people | Jeffrey C. Sprecher, Founder/Chairman/CEO |
| Products | Options/futures exchange |
| Revenue |
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| Operating income |
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| Net income |
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| Website | www.theice.com |
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References: [1] |
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IntercontinentalExchange, Inc. is an American commodity exchange. It operates regulated exchanges and clearing houses for agricultural, credit, currency, emissions, energy and equity index products.[ICE 1] It is headquartered in Atlanta, Georgia with offices in New York, London, Chicago, Houston, Winnipeg, Calgary, Washington, D.C. and Singapore.
Markets
- ICE Futures U.S.
- ICE Endex
- ICE Futures Canada
- ICE OTC
ICE Futures Europe
ICE Futures, based in London, acquired the International Petroleum Exchange. The International Petroleum Exchange was one of the world's largest energy futures and options exchanges. Its flagship commodity, Brent Crude was a world benchmark for oil prices, but the exchange also handled futures contracts and options on fuel oil, natural gas, electricity (baseload and peakload), coal contracts and, as of 22 April 2005, carbon emission allowances with the European Climate Exchange (ECX).
The IPE was acquired by the IntercontinentalExchange in 2001. The IPE was an open outcry exchange until 7 April 2005, when its name was changed to ICE Futures and all trading was shifted onto an electronic trading platform.
Products
ICE Futures & Options
- Agriculture
- Financials
- Crude Oil and Refined
- Electricity
- Natural Gas/Liquids
- UK Natural Gas
- Other
ICE OTC
- Crude Oil and Refined
- Natural Gas
- Electricity
History
Jeffrey C. Sprecher, founder, chairman, and Chief Executive Officer, was a power plant developer who spotted a need for a seamless market in the natural gas used to power generators. In the late 1990s, Jeffrey C. Sprecher, ICE's founder, chairman, and Chief Executive Officer, acquired Continental Power Exchange, Inc. with the objective of developing an Internet-based platform to provide a more transparent and efficient market structure for OTC energy commodity trading.[2]
In May 2000, ICE was founded by Jeffrey C. Sprecher and backed by Goldman Sachs, Morgan Stanley, BP, Total, Shell, Deutsche Bank and Societe Generale [3][4] who represent some of the world's largest energy traders.
The new exchange offered the trading community better price transparency, more efficiency, greater liquidity and lower costs than manual trading. While the company's original focus was energy products (crude and refined oil, natural gas, power, and emissions), acquisitions have expanded its activity into soft commodities (sugar, cotton and coffee), foreign exchange and equity index futures.
In a timely response to US financial crisis in 2008, Sprecher formed ICE US Trust based in New York, now called ICE Clear Credit LLC, to serve as a limited-purpose bank, a clearing house for credit default swaps. Sprecher worked closely with the Federal Reserve to serve as its over-the-counter (OTC) derivatives clearing house. [notes 1] The principal backers for ICE US Trust are the same financial institutions most affected by the crisis, the top ten of the world's largest banks (Goldman Sachs, Morgan Stanley, Bank of America, Citi, Credit Suisse, Deutsche Bank, JPMorgan, Merrill Lynch, Morgan Stanley and UBS). Sprecher's clearing house cleared their global credit default swaps (CDS) in exchange for sharing profits with them (Weitzman Financial Times 2008-10-31, Terhune 2010-07-29).By 2010, Intercontinental Exchange had cleared more than $10 trillion [5][6]
Mergers and Acquisitions
- International Petroleum Exchange (IPE) 2001
In June 2001, ICE expanded its business into futures trading by acquiring the International Petroleum Exchange (IPE), now ICE Futures Europe, which operated Europe's leading open-outcry energy futures exchange. Since 2003, ICE has partnered with the Chicago Climate Exchange (CCX) to host its electronic marketplaces. In April 2005, the entire ICE portfolio of energy futures became fully electronic and ICE closed International Petroleum Exchange's high profile and historic trading floor.[2]
In April 2010 ICE acquired Climate Exchange PLC for 395 million pounds ($622 million) and European Climate Exchange (ECX) as part of its purchase.[7] Exchange-traded emissions products were first offered by the European Climate Exchange (ECX), which was established in 2005, by listing products on the ICE Futures Europe's trading platform. ICE Futures Europe is the leading market for carbon dioxide (CO2) emissions. ICE's ECX products comply with the requirements of the European Union Emission Trading Scheme.
- New York Board of Trade (NYBOT) 2005
ICE became a publicly traded company on November 16, 2005, and was added to the Russell 1000 Index on June 30, 2006. The company expanded rapidly in 2007, acquiring the New York Board of Trade (NYBOT),[8] ChemConnect (a chemical commodity market), .
- Chicago Board of Trade Unsuccessful Bid 2007
In March 2007 ICE made an unsuccessful $9.9 billion bid for the Chicago Board of Trade, which was instead acquired by the Chicago Mercantile Exchange.[9]
- Winnipeg Commodity Exchange (WCE) 2007
IntercontinentalExchange Inc., the "upstart Atlanta-based energy bourse" purchased the privately held 120-year-old Winnipeg Commodity Exchange, known for its canola futures contract for $40 million.[10] The Winnipeg Commodity Exchange (WCE) as subsidiary of ICE Futures Canada was renamed ICE Futures Canada as of January 1, 2008. (See also ICE Futures U.S.(TM) and ICE Futures Europe(TM).[11] In 2004, the Winnipeg Commodity Exchange had "closed its open-outcry trading floor" becoming "the first North American agricultural futures exchange to trade exclusively on an electronic platform" by trading via the "Chicago Board of Trade's electronic platform, and [using] clearing services from the Kansas City Board of Trade.[10] IntercontinentalExchange converted Winnipeg Commodity Exchange contracts to the IntercontinentalExchange platform.[10] IntercontinentalExchange maintained an office and "small core staff" in Winnipeg, Manitoba. The Manitoba Securities Commission oversee its operations.[10]
- TSX Group's Natural Gas Exchange Partnership 2008
In January 2008, ICE partnered with TSX Group's Natural Gas Exchange, expanding their offering to clearing and settlement services for physical OTC natural gas contracts.[12]
- NYSE Euronext 2013
In February 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Borse, speculation developed that ICE and Nasdaq could mount a counter-bid of their own for NYSE Euronext. ICE was thought to be looking to acquire the American exchange's derivatives business, Nasdaq its cash equities business. As of the time of the speculation, "NYSE Euronext’s market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion."[13] Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Merc (CME) to join in what would be probably be an $11–12 billion counterbid for NYSE.[14] On April 1, ICE and Nasdaq made an $11.3 billion offer which was rejected April 10 by NYSE. Another week later, ICE and Nasdaq sweetened their offer, including a $.17 increase per share to $42.67 and a $350 million breakup fee if the deal were to encounter regulatory trouble. The two said the offer was a $2 billion (21%) premium over the Deutsche offer and that they had fully committed financing of $3.8 billion from lenders to finance the deal.[15] The Justice Department, also in April, "initiated an antitrust review of the proposal, which would have brought nearly all U.S. stock listings under a merged Nasdaq-NYSE." In May, saying it "became clear that we would not be successful in securing regulatory approval," the Nasdaq and ICE withdrew their bid.[16] The European Commission then blocked the Deutsche merger on 1 February 2012, citing the fact that the merged company would have a near monopoly.[17][18]
In December 2012, ICE announced it would buy NYSE Euronext for $8 billion, pending regulatory approval. Jeffrey Sprecher will retain his position as Chairman and CEO.[19] The boards of directors of both ICE and NYSE Euronext approved the acquisition.[20][notes 2]
Notes
- ^ US regulators were keen on the kind of clearing house for opaque over-the-counter (OTC) derivatives as a risk management device. In the absence of a central counterparty - which would guarantees pay-outs should a trading party be unable to do so - there was a high risk of massive market disruption. (Weitzman Financial Times 2008-10-31)."
- ^ IntercontinentalExchange was advised by Morgan Stanley, BMO Capital Markets, Broadhaven Capital partners, JPMorgan Chase, Lazard, Cociete Generale and Wells Far. Perella Weinberg Partners, BNP Paribas, the Blackstone Group, Citigroup, Goldman Sachs and Moelis & Co. advised NYSE Euronext.
References
- ^ ICE 2011 Form 10-K
- ^ a b Nathaniel Popper (January 19, 2013). "Buying the N.Y.S.E., in One Shot". New York Times. Retrieved February 15, 2013.
- ^ Michael Greenberger, University of Maryland School of Law url=http://digitalcommons.law.umaryland.edu/cong_test/27/ (2008). "Energy Market Manipulation and Federal Enforcement Regimes". Testimony presented at a hearing of the U.S. Senate Committee on Commerce, Science, and Transportation. 110th Congress, 1st Session (2008):. Digitalcommons.law.umaryland.edu.
- ^ Louise Story (December 11, 2010). "A Secretive Banking Elite Rules Trading in Derivatives". New York Times.
- ^ Chad Terhune (July 29, 2010). "ICE's Jeffrey Sprecher: The Sultan of Swaps". Bloomberg Business Week. Retrieved February 15, 2013.
- ^ Hal Weitzman in Chicago (October 31, 2008). "ICE deal signals new clearing house for credit default swaps".
- ^ Szabo, Michael (August 11, 2010). "ICE cuts staff at Chicago Climate Exchange: sources". Reuters. Retrieved May 18, 2011.
- ^ ICE Press Release (1/12/2007). "IntercontinentalExchange and New York Board of Trade Complete Merger"
- ^ Robert Manor (7/11/2007). "CBOT loss won't alter ICE agenda", Chicago Tribune.
- ^ a b c d Rampton, Roberta (June 23, 2007). "Upstart ICE to buy Winnipeg exchange in $40 million deal". The Star (Winnipeg: Reuters News Agency). Retrieved February 2013.
- ^ "Winnipeg Commodity Exchange to Become Ice Canada". Press Release. theice.com. December 31, 2007. Retrieved February 2013.
- ^ ICE NGX "NGX Physical Gas and Power Products Coming to ICE"
- ^ De la Merced, Michael J., "Nasdaq and ICE Hold Talks Over Potential N.Y.S.E. Bid", The New York Times Dealbook, February 18, 2011, 12:46 pm. Retrieved 2011-02-18.
- ^ Fraser, Michelle E., "Nasdaq May Ask CME or ICE for Help in NYSE Counterbid, WSJ Says", Bloomberg, February 26, 2011 9:30 AM ET. Retrieved 2011-03-01.
- ^ Morcroft, Greg, "Nasdaq and ICE sweeten the pot for NYSE", MarketWatch, April 19, 2011 10:05 a.m. EDT. Retrieved 2011-04-19.
- ^ Pollock, Lauren, "Nasdaq, ICE withdraw bid for NYSE after DOJ talks", MarketWatch, May 16, 2011, 8:09 a.m. EDT. Retrieved 2011-05-16.
- ^ "Mergers: Commission blocks proposed merger between Deutsche Börse and NYSE Euronext", European Commission press release, 01 February 2012.
- ^ "NYSE Euronext merger with Deutsche Boerse blocked by EU", BBC, 1 February 2012.
- ^ Rothwell, Steve. "For the New York Stock Exchange, a sell order" Associated Press via San Jose Mercury News (December 20, 2012)
- ^ cbsnews.com
External links
- Official ICE site
- Davis, Philip, "The Global Oil Scam: 50 Times Bigger than Madoff", Seeking Alpha, November 11, 2009.
- Trading Organizations (Report). US Commodities Futures Trade Commission. http://sirt.cftc.gov/SIRT/SIRT.aspx?Topic=TradingOrganizations&implicit=true&type=DCM&status=Vacated&CustomColumnDisplay=TTTTTTTT. Retrieved March 15, 2013.
- Brendan Bilko (March 10, 2011). Open outcry trading at CME Group fading into obscurity (Report). Chicago: Medill Reports. http://news.medill.northwestern.edu/chicago/news.aspx?id=182756. Retrieved March 15, 2013.
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