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ICE Praised for Voluntary CFTC Reporting

The American Public Gas Association (APGA), a longtime critic of the opaqueness of over-the-counter (OTC) energy trading, on Monday praised a move by the IntercontinentalExchange (ICE) to voluntarily report trade information to the Commodity Futures Trading Commission (CFTC).

Atlanta-based ICE is an exempt over-the-counter energy market under the Commodity Exchange Act but is prominent in the trading of natural gas swaps that are pegged to natural gas futures contracts traded on the New York Mercantile Exchange (Nymex). Last year, the CFTC requested that ICE provide trading information similar to what Nymex provides CFTC in its Commitments of Traders reports, and in November ICE agreed to do so.

"APGA has been pushing for greater transparency in the natural gas over-the-counter market and this is a positive first step," said APGA President Bert Kalisch.

However, he noted that the vast majority of OTC trades occur off the electronic trading platforms and are not covered by the agreement between ICE and the CFTC. APGA strongly believes that there should be greater transparency in the voice-brokered portion of the market as well, the association said.

The APGA, Iowa Association of Municipal Utilities (IAMU) and more than 30 Iowa public natural gas systems last week called on Senate Agriculture Committee Chairman Tom Harkin (D-IA) to press for legislation in the new Congress that addresses a "critical lack of transparency" in the over-the-counter (OTC) gas market (see Daily GPI, Jan. 25). A similar push was made in 2005 and 2006 (see Daily GPI, March 4, 2005).

"One of the arguments that APGA has often heard against OTC reporting is that the individual transactions are so different that reporting cannot be done," the association said Monday. "With this step, ICE repudiates those arguments and affirms that reporting can be done in a manner that will provide critical information to the CFTC. This announcement also affirms that reporting will not disrupt the markets, another argument often used against transparency."

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