As an operator of global regulated futures exchanges and over-the-counter (OTC) markets, Atlanta-based IntercontinentalExchange Inc. (ICE) said late last month it plans to introduce more than 50 additional cleared energy contracts in its OTC marketplace beginning Friday (Dec. 5) and extending into 2009.
ICE currently lists more than 100 cleared OTC energy contracts, and more than 90% of ICE's OTC transaction volume is cleared, the exchange reported. The first set of 21 new products consists of North American power and natural gas swaps, as well as swaps related to the global oil markets. The initial set of new contracts available for OTC clearing includes:
"The establishment of ICE Clear Europe has facilitated the launch of these new cleared OTC contracts," said ICE President Charles A. Vice. "Central counterparty clearing is increasingly important in today's constrained credit environment."
The new cleared OTC contracts are in addition to the new gc ICE Newcastle Coal Futures contract previously announced by globalCOAL and ICE Futures Europe, which will be also be available beginning on the trade date on Friday (Dec. 5).
In 2002 ICE unveiled the concept of cleared OTC energy contracts, which provide participants with access to centralized clearing and settlement arrangements while reducing bilateral credit risk and capital required for each OTC trade. As of November, ICE OTC and ICE Futures Europe contracts are cleared through ICE Clear Europe.
On Nov. 3 ICE Clear Europe launched as the first new major clearinghouse in London in more than a century. The clearinghouse was formed to provide clearing services to the global energy markets for OTC and futures transactions. ICE Clear Europe enables the efficient development of new cleared markets to support the risk management needs of customers, with the capability to offer similar services to an expanded range of asset classes, ICE said.
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