CFTC Makes Further Term Changes with ICE Futures Europe


"The conditions will apply to any ICE Futures Europe contracts currently linked to a CFTC-regulated exchange contract. . ."

The U.S. Commodity Futures Trading Commission announced further amendments on Aug. 20 to terms under which ICE Futures Europe may makes its electronic trading and order matching system available to exchange members in the U.S.

CFTC said the new conditions were designed to enhance the U.S. commodities trading regulator's ability to conduct market surveillance and oversight. The InterContinental Exchange division lists cash-settled natural gas contracts for trading that settle based on prices of contracts trading on the New York Mercantile Exchange, which the CFTC regulates. The conditions will apply to any ICE Futures Europe contracts currently linked to a CFTC-regulated exchange contract and those listed in the future, CFTC said.

Under the conditions, it continued, ICE Futures Europe will be required within 120 days to provide CFTC's staff with trade execution and audit trail data for the U.S. regulator's trade surveillance system for all of ICE Futures Europe's linked contracts; on-site visits to oversee the exchange's ongoing compliance with its no-action relief; advance copies of all rules, rule amendments, circulars, and other notices which it publishes; and copies of all disciplinary notices involving its linked contracts upon closure of the action.

CFTC added that in the event that it directs NYMEX to take emergency action with respect to a linked contract, ICE Futures Europe would be required to take similar action with respect to the linked contract on its exchange. The moves followed CFTC's July 30 announcement that it would begin to integrate ICE Futures Europe's large trader data into the regulator's commitment of traders report.

The U.S. commodities regulator said the new actions publish daily trading information in the linked contracts, and establish position limits or accountability levels comparable to the ones for the counterpart linked NYMEX contracts.

The new conditions also built on a November 2006 MOU between the CFTC and its British counterpart, the Financial Services Authority, which concerns consultation, cooperation and the exchange of information related to market oversight and the detection of potential abusive or manipulative trading practices that involve trading in related contracts on British and U.S. derivatives exchanges. The two regulatory agencies agreed on Aug. 20 to strengthen that agreement.

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