IntercontinentalExchange Announces New Fair Trading Initiatives; Takes Leadership Role to Improve Confidence in Energy Trading Markets.Business Editors ATLANTA--(BUSINESS WIRE)--Oct. 10, 2002 IntercontinentalExchange (Intercontinental in·ter·con·ti·nen·tal adj. 1. Extending or taking place between or among continents: intercontinental exploration; intercontinental cooperation. 2. ), the leading global electronic commodity trading platform, today announced that it is implementing a number of fair trading initiatives to its over-the-counter (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). ), Internet-based, energy and metals trading markets. Intercontinental plans to take the following steps to further ensure the integrity of its platform:
-- Intercontinental will make technical changes to its platform
to detect and prevent any trade that may potentially meet the
US Federal Energy Regulatory Commission's ("FERC") definition
of a "wash" or "round trip" trade from being gathered into and
published as a part of its market data dissemination. Although
Intercontinental cannot determine the intent of trade counter
parties (which is a necessary condition to inappropriate
"wash" trading), in the abundance of caution, it will
automatically eliminate from publication any and all trades
that occur within two minutes to reverse a trade between the
same parties in the same contract at the same price.
Intercontinental's platform applies a time stamp to every
transaction, synchronized to the atomic clock at the
Coordinated Universal Time -- which will now be used to
automatically detect such trades and prevent their inclusion
in Intercontinental's published indices and settlement prices.
-- Intercontinental will adopt a trading Code of Conduct, based
on the recently issued Code of Ethics and Sound Trading
Practices for Electric Power Suppliers by the Electric Power
Supply Association (EPSA). Intercontinental's Code of Conduct
will become a part of its standard Participant Agreement for
all trading participants on its platform. In order for any
company to trade on the Intercontinental platform, it must
agree to these amended terms. If an Intercontinental
participant violates the Code, Intercontinental will maintain
the ability to suspend, permanently expel the participant from
its system, or take other measures.
-- Intercontinental will expand its ability to verify the
completion of trades that occur on its platform. Currently,
Intercontinental's participants agree that any transaction
completed on its platform constitutes a legally binding
obligation between the parties. Intercontinental also offers a
legal confirmation service -- eConfirm -- in which
participants can legally bind trades conducted outside of
Intercontinental through over 70 additional third-party energy
and metals brokerage firms and trading venues. Now, in
addition to these two mechanisms, Intercontinental will
require its participants to notify Intercontinental should
they decide to not complete trades entered into via the
Intercontinental platform. In other words, if a transaction
occurs on the Intercontinental platform, and if, by subsequent
agreement between the parties outside Intercontinental, the
transaction is cancelled, Intercontinental will require that
it be notified.
-- Finally, Intercontinental intends to appoint a full-time
Director to oversee compliance with these fair trading
initiatives.
"We are taking a leadership role in the OTC commodities markets by introducing and enforcing comprehensive fair trading initiatives," said Jeffrey Sprecher, Intercontinental's Chief Executive Officer. "These actions further demonstrate that Intercontinental is committed to bringing solutions to the issues that have faced the energy markets in recent months." "We're gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. to see that other market participants The term market participant is used in United States constitutional law to describe a U.S. State which is acting as a producer or supplier of a marketable good or service. When a state is acting in such a role, it may permissibly discriminate against non-residents. and stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. are building on the work of the association's members by taking appropriate actions to help restore confidence in the nation's energy markets," said EPSA EPSA Electric Power Supply Association EPSA European Pharmaceutical Students Association EPSA Exploration & Production Sharing Agreement EPSa Elektronik & Präzisionsbau Saalfeld GmbH (German electronics manufacturer) President Lynne H. Church. "These additional steps should hopefully help to convince policymakers and the public that vital energy trading is being conducted with integrity and the highest ethical standards." Intercontinental recently concluded its investigation into alleged "round-trip" trading on its platform. In August, a major energy trading concern indicated that it had transacted 28 of 89 such trades that were said to have "no legitimate business purpose" on the Intercontinental platform. The remaining 61 trades were transacted through unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. brokers or other trading venues, during a three-and-one-half year period beginning in 1999. Pursuant to US Commodities Futures Trading Commission oversight, Intercontinental is required to keep trade records for five years -- which records were recalled for its investigation. Intercontinental found that none of these trades were included in any indices or settlement prices published by Intercontinental and contributed an insignificant 0.005% (five one thousandths of one percent) of the transactions conducted on its platform. While Intercontinental provides its indices to third party trade publications for redistribution re·dis·tri·bu·tion n. 1. The act or process of redistributing. 2. An economic theory or policy that advocates reducing inequalities in the distribution of wealth. , its agreements specifically prohibit co-mingling this data with telephonically surveyed market data to ensure results are auditable. Notwithstanding these findings, Intercontinental has concluded that the additional fair trading initiatives, combined with its existing CFTC CFTC See: Commodity Futures Trading Commission CFTC See Commodity Futures Trading Commission (CFTC). regulatory oversight will further enhance its ability to prevent these kinds of activities on its platform and ensure the platform's integrity. Intercontinental has provided liquid and transparent markets transparent market A market in which current quotation and trade information is readily available to the public. since it's founding in 2000, and played a significant role in minimizing the shocks to energy commodity pricing during the Enron crisis. Intercontinental's open, many-to-many platform has been instrumental in stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. the supply and demand in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. power markets over the past year and has seen strong growth in transaction volumes and new users across the board in its commodities markets, OTC clearing and electronic confirmations businesses. About IntercontinentalExchange The IntercontinentalExchange electronic platform is used by thousands of traders and trading operations professionals every business day to trade more than 600 listed commodity and derivative contract types around the world, including crude oil and refined products, natural gas, power, precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. , weather derivatives Weather derivatives are financial instruments that can be used by organizations or individuals as part of a risk management strategy to reduce risk associated with adverse or unexpected weather conditions. and emissions allowances. Contract forms include physical delivery as well as financially settled swaps, spreads, differentials and options based on a variety of fixed and floating price indices. Intercontinental also supports the broader trading infrastructure through its OTC clearing and credit management, eConfirms, and market data services. Based in Atlanta, with offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Houston, Chicago, London and Singapore, IntercontinentalExchange also owns the International Petroleum Exchange of London (IPE IPE - Integrated Programming Environment ), Europe's leading energy futures and options exchange. The IPE provides regulated open outcry Open Outcry A method of trading on a commodity exchange by making verbal bids and offers in the trading pits. Notes: A contract is made if one trader cries out that he wants to sell at a certain price and then another trader yells out that he will buy at that same price. and electronic marketplaces where industry participants use futures and options to manage their price risk exposure in the physical energy market. Products traded on the IPE include Brent Crude Brent Crude is one of the major classifications of oil consisting of Brent Crude, Brent Sweet Light Crude, Oseberg and Forties. Brent Crude is sourced from the North Sea. The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum. futures and options, Gas Oil futures and options, and Natural Gas futures. For more information about IntercontinentalExchange, please visit the website at http://www.theice.com. More information about IPE can be found at www.ipe.uk.com. |
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