What Is the Intercontinental Exchange (ICE)?
Let me tell you directly: The Intercontinental Exchange, or ICE, is an American company that runs a range of financial and commodity marketplaces, including futures and cash exchanges, while also handling central clearing services. It started back in May 2000 in Atlanta, Georgia. You'll find ICE's operations covering futures exchanges in places like the U.S., U.K., EU, Canada, Singapore, and Abu Dhabi. On the cash side, it includes the New York Stock Exchange (NYSE), NYSE ARCA, NYSE National, NYSE AMEX Options, NYSE ARCA Options, and NYSE Chicago. Plus, ICE manages six central clearing houses: ICE Clear Europe, ICE Clear U.S., ICE Clear Credit, ICE Clear Netherlands, ICE Clear Singapore, and ICE NGX.
Key Takeaways on ICE
Here's what you need to know upfront: ICE is that American firm owning and operating those financial and commodity setups. It went public on November 16, 2005, and joined the Russell 1000 Index by June 30, 2006. Starting with energy products, ICE broadened out through acquisitions to cover other commodities, foreign cash exchanges, and equity index futures.
Understanding the Intercontinental Exchange (ICE)
I founded ICE in May 2000—well, actually, Jeffrey C. Sprecher did, as a power plant developer aiming for a better, more transparent platform for over-the-counter energy commodity trading. Compared to old manual methods, this setup brought better price transparency, efficiency, liquidity, and lower costs. At the start, we focused on energy like crude oil, refined oil, natural gas, power, and emissions. But through acquisitions, ICE expanded to commodities such as sugar, cotton, and coffee, plus foreign cash exchanges and equity index futures.
When the 2007-08 financial crisis hit, Sprecher set up ICE Clear Credit to handle clearing for credit default swaps and OTC derivatives, offering key risk management. It launched in March 2009, got Federal Reserve approval as a bank, and later CFTC and SEC regulation as a clearing house. ICE led the way in clearing for OTC energy and credit derivatives. By the Q1 2022 report, ICE had cleared over $16.4 trillion in credit default swaps, up 9.7% year-over-year.
Growth for ICE since 2000 has come mostly from buying other exchanges. The first was the International Petroleum Exchange in 2001, now ICE Futures Europe. Then came the New York Board of Trade in 2005, Winnipeg Commodity Exchange (now ICE Futures Canada) in 2007, Creditex Group in 2008, and Climate Exchange in 2010. In the next decade, acquisitions included NYSE Euronext in 2013, Interactive Data Corporation in 2015, Standard & Poor's Securities Evaluations in 2016, Virtu BondPoint in 2017, Chicago Stock Exchange in 2018, Simplifile in 2019, Ellie Mae in 2020, and Black Knight in 2022.
In June 2016, ICE rolled out ICE Data Services, a suite for real-time data, valuations, analytics, reference data, evaluated pricing, and connectivity. These tools serve NYSE, SuperDerivatives, Interactive Data, and other clients like financial institutions, asset managers, and investors. They also deliver unique data from global exchanges and fixed income markets.
According to the 2021 FIA report, ICE ranks as the fourth-largest exchange group globally, after CME Group, Brazil's B3, and India's National Stock Exchange. As of July 2022, its market cap stands at $53.88 billion.
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