IntercontinentalExchange (ICE) received a ruling from the U.S. Internal Revenue Service (IRS) designating ICE Futures as a "qualified board or exchange," which provides U.S. participants in ICE Futures markets with "60/40 tax treatment."

ICE Futures is regulated in the United Kingdom and has a growing base of customers in the U.S. Additionally, ICE Futures has approval to offer its screens in 46 jurisdictions around the globe, ICE said.

Now that it is designated as a "qualified board or exchange" under Section 1256 of the Internal Revenue Code, ICE Futures contracts will offer U.S. traders the same tax treatment as contracts traded on U.S. futures exchanges. With 60/40 tax treatment, 60% of gains or losses will be treated as long-term capital gains or losses, and 40% of gains or losses will be treated as short-term capital gains or losses.

The ruling applies to contracts traded on ICE futures on and after April 1. Traders on the New York Board of Trade, ICE's U.S.-regulated futures subsidiary, already receive 60/40 tax treatment.

ICE is locked in a rivalry with the Chicago Mercantile Exchange to merge with the Chicago Board of Trade (see Daily GPI, March 23). Wednesday ICE announced an alliance with Calgary-based Natural Gas Exchange, which will bring NGX's physical clearing capabilities to U.S. traders (see Daily GPI, March 29).

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