Intercontinental Exchange (ICE): What It Is and What It Does, What Is the Intercontinental Exchange (ICE)? The Intercontinental Exchange (ICE) is an American company that owns and operates financial and commodity marketplaces and exchanges. It was founded in May 2000 in Atlanta, Georgia. ICE operations include futures exchanges, cash exchanges, central clearing houses, and market services for off-exchange trading.1
Key Details about ICE
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. When it was founded, the company's primary focus was on energy products; however, through various acquisitions, the company's activities have broadened to include other commodities, foreign cash exchanges, and equity index futures.
Exploring ICE Operations
In May 2000, ICE was founded by Jeffrey C. Sprecher, a power plant developer who wanted to create a more transparent and efficient platform for over-the-counter (OTC) energy commodity trading.5 Compared with manual trading, the new platform provided greater price transparency, efficiency, liquidity, and had lower costs. When it was founded, the company's primary focus was on energy products, specifically crude and refined oil, natural gas, power, and emissions.5 Through various acquisitions, the company's activities broadened to include other commodities—such as sugar, cotton, and coffee—in addition to foreign cash exchanges and equity index futures.
Evolution Post 2007–08 Financial Crisis
In response to the 2007–08 Financial Crisis, Sprecher formed ICE Clear Credit, which would serve as a clearing house for credit default swaps, over-the-counter (OTC) derivatives, and provide crucial risk management services for the market. In March 2009, ICE Clear Credit was created and approved by the Federal Reserve as a bank and two years later, was designated as a clearing house and regulated by the CFTC and SEC.7 ICE was the first to offer clearing services in the OTC energy and credit derivatives markets.8 According to ICE's Q1 2022 report, ICE had cleared more than $16.4 trillion in credit default swaps, up YOY by 9.7%.9
Since its founding in 2000, ICE's company growth has primarily been achieved through the acquisition of other exchanges. It's first acquisition was the International Petroleum Exchange (IPE), now ICE Futures Europe, in 2001.5 In the following decade, the company expanded by acquiring the New York Board of Trade (NYBOT) in 2005, Winnipeg Commodity Exchange, which is now ICE Futures Canada in 2007, Creditex Group in 2008, and Climate Exchange in 2010.10 Several more acquisitions occurred the next ten years: 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 2019.1112 ICE's most recent expansion has continued with the acquisitions of Ellie Mae in 2020 and Black Knight in 2022.1314
ICE's Data Services
In June 2016, ICE launched a new suite of data services and software, called ICE Data Services. The proprietary real-time data, valuations, analytics, reference data, evaluated pricing, and connectivity solutions employed by ICE Data Services are used by NYSE, SuperDerivatives, Interactive Data (IDC), and other ICE customers, including financial institutions, asset managers, and individual investors. ICE Data Services also provides its customers with unique data from global exchanges and fixed income markets.15
Market Position and Capitalization
According to the 2021 FIA report, ICE is the fourth-largest exchange group in the world, behind CME Group, Brazil's B3, and the National Stock Exchange of India, ranked at the top spot.16 As of July 2022, the company has a market capitalization of $53.88 billion.17