IntercontinentalExchange, or ICE, the exchange and clearing house operator, has announced that all cleared OTC products on its OTC energy market will be transitioned to futures products in January 2013.
The products will continue to be listed on the ICE platform and cleared at ICE Clear Europe, and block trades will still be available but subject to applicable requirements. Uncleared swaps will still be listed on ICEs OTC platform, which will be registered as a swap execution facility.
Cleared North American natural gas, electric power, environmental products and natural gas liquids swaps will be listed as futures on the energy division of ICE Futures U.S., while cleared oil products, freight and iron ore swaps will be listed as futures on ICE Futures Europe. All products will continue to clear at ICE Clear Europe.
ICEs transition from OTC swaps to futures is subject to approvals from the Commodity Futures Trading Commission and the Financial Services Authority.
“Jurisdictions around the world are enacting policies designed to further regulate OTC swaps markets,” says Chuck Vice, president and COO of ICE. “Based upon our extensive analysis of new swap rules and consultations with a wide variety of customers, we believe that these policies will increase the cost and complexity for swaps market participants, both in absolute terms and relative to that of futures market participants. We anticipate a seamless transition that will largely preserve existing methods of transacting in ICE’s markets.”
(OS)