The Intercontinental Exchange (ICE) is an American company that owns and operates financial and commodity marketplaces and exchanges. Founded in May 2000 in Atlanta, Georgia, ICE’s impressive operations encompass futures exchanges, cash exchanges, central clearing houses, and market services for off-exchange trading.
ICE maintains futures exchanges across the U.S., U.K., EU, Canada, Singapore, and Abu Dhabi. Its cash exchanges portfolio includes prominent names like the New York Stock Exchange (NYSE), NYSE ARCA, NYSE National, NYSE AMEX Options, NYSE ARCA Options, and NYSE Chicago. Further strengthening its presence, ICE operates 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
- The Intercontinental Exchange (ICE) is an American company that owns and operates financial and commodity marketplaces and exchanges.
- ICE was founded in 2000 and became a publicly traded company on November 16, 2005; it was added to the Russell 1000 Index on June 30, 2006.
- Initially focusing on energy products, ICE has broadened its activities to include other commodities, foreign cash exchanges, and equity index futures.
ICE took its step to broader recognition by becoming a publicly traded company on November 16, 2005, and was subsequently added to the Russell 1000 Index on June 30, 2006.
Understanding the Intercontinental Exchange (ICE)
Jeffrey C. Sprecher founded ICE in May 2000, aiming to create a more transparent and efficient platform for over-the-counter (OTC) energy commodity trading. Compared to traditional manual trading, this new platform offered enhanced price transparency, efficiency, liquidity, and reduced costs.
The company’s original focus was on energy products, especially crude and refined oil, natural gas, power, and emissions. Over time, ICE diversified through various acquisitions to include other commodities like sugar, cotton, and coffee, as well as foreign cash exchanges and equity index futures.
In response to the 2007-08 Financial Crisis, Sprecher established ICE Clear Credit to serve as a clearing house for credit default swaps and OTC derivatives, providing essential risk management services. Formed in March 2009, ICE Clear Credit quickly garnered approval from the Federal Reserve as a bank and was designated as a clearing house regulated by the CFTC and SEC two years later. ICE also became the first to offer clearing services in the OTC energy and credit derivatives markets. Notably, by Q1 2022, ICE cleared over $16.4 trillion in credit default swaps, a year-over-year increase of 9.7%.
Since its inception in 2000, ICE’s growth has been predominantly fueled by acquisitions. Its first acquisition was the International Petroleum Exchange (IPE), now known as ICE Futures Europe, in 2001. Notable acquisitions that followed include the New York Board of Trade (NYBOT) in 2005, Winnipeg Commodity Exchange in 2007, Creditex Group in 2008, and Climate Exchange in 2010. Further acquisitions over the next decade include NYSE Euronext in 2013, Interactive Data Corporation (IDC) in 2015, Standard & Poor’s Securities Evaluations, Inc. in 2016, Virtu BondPoint in 2017, Chicago Stock Exchange (CHX) in 2018, and Simplifile, LC in 2019. ICE continued its expansion with the acquisitions of Ellie Mae in 2020 and Black Knight in 2022.
In June 2016, ICE launched an innovative suite of data services and software, known as ICE Data Services. This suite offers proprietary real-time data, valuations, analytics, reference data, evaluated pricing, and connectivity solutions utilized by NYSE, SuperDerivatives, Interactive Data (IDC), and other ICE clients, including financial institutions, asset managers, and individual investors. ICE Data Services provides unique data from global exchanges and fixed income markets, further solidifying its invaluable role.
As per the 2021 FIA report, ICE holds the position of the fourth-largest exchange group globally, following CME Group, Brazil’s B3, and the National Stock Exchange of India. As of July 2022, ICE boasts a market capitalization of $53.88 billion.
References
- Intercontinental Exchange. “2021 Annual Report”, Pages 4, 5-8, 19
- Intercontinental Exchange. “2021 Annual Report”, Pages 7, 9, 16, 17.
- Intercontinental Exchange. “ICE Added to Russell 1000(R) Stock Index”.
- Intercontinental Exchange. “Investor FAQs”, Select When was ICE’s initial public offering on the NYSE?
- Intercontinental Exchange. “Our History, An Interview with Jeff Sprecher; Part 1: How ICE Began”.
- Intercontinental Exchange. “Our History, An Interview with Jeff Sprecher; Part 2: ICE’s Expansion into Clearing”.
- Intercontinental Exchange. “ICE Clear Credit Regulation and Governance Fact Sheet”, Pages 2, 4
- Intercontinental Exchange. “Clear Credit”.
- Intercontinental Exchange. “ICE Credit Derivative Services”, Page 4
- Intercontinental Exchange. “Winnipeg Commodity Exchange to Become ICE Futures Canada”.
- Intercontinental Exchange. “Intercontinental Exchange to Acquire Standard & Poor’s Securities Evaluations, Inc. and Credit Market Analysis from McGraw Hill Financial”.
- Intercontinental Exchange. “Intercontinental Exchange Finalizes Acquisition of Chicago Stock Exchange”.
- Intercontinental Exchange. “2021 Annual Report”, Page 4.
- Intercontinental Exchange. “Intercontinental Exchange Enters into Definitive Agreement to Acquire Black Knight”.
- Intercontinental Exchange. “Intercontinental Exchange Launches Expanded ICE Data Services”.
- FIA. “Global Futures and Options Trading Hits Another Record in 2021”.
- Yahoo! Finance. “Intercontinental Exchange, Inc. (ICE)”.
