ICE Trade Vault Gauges U.S. Clients for European Reporting

Terry Flanagan

Bruce Tupper, president of ICE Trade Vault, said IntercontinentalExchange has more than 700 participants in its US trade repository who may represent additional business for its European counterpart.

On November 29 the European Securities and Markets Authority approved ICE Trade Vault Europe as a trade repository for the reporting of swaps and futures trades under the European Market Infrastructure Regulation. Rival CME European Trade Repository was approved on the same day, taking the total number of authorised repositories to six.

“We have more than 700 participants in our US repository and there is a good overlap of potential participant institutions with Trade Vault Europe,” Tupper told Markets Media. “Clients can use their existing connectivity and front-end to send all the data to the European repository from one screen. The feedback from most of our end users is that they will use ICE for delegated reporting.”

In June 2012 ICE Trade Vault US became the first Swap Data Repository to receive provisional regulatory approval from the Commodity Futures Trading Commission under the requirements of the Dodd-Frank regulatory reform act.

Tupper said: “We were able to leverage our US SDR as it is a scaleable platform which has handled more than 17 million trades and so is a proven technology. However we are also very aware of the differences between Emir and Dodd-Frank and have made the necessary changes.”

For example, Emir requires exchange-traded derivatives to be reported while Frank-Dodd does not. “For over-the-counter trades most of our commodities clients will be ready by February. For exchange traded derivatives the timetable is very aggressive and ESMA is still drafting Q&As,” Tupper added.

ICE Trade Vault Europe is authorised to report trades in four derivatives asset classes – commodities, credit, interest rate and equity – but has chosen not to report foreign exchange.

“Our selling point is that we can handle the lower volume and complicated commodity trades as well as standardised high-volume futures where the amount of data is very large,” said Tupper.

Yesterday ICE provided an update for its transition of Liffe, the derivatives arm of NYSE Euronext, to ICE Futures Europe to form one London-based derivatives exchange led by David Peniket.

ICE said it will keep the Liffe matching engines in the UK data centre in Basildon so customers can use existing colocation facilities and connections. All Liffe contracts will be added to WebICE, the exchange’s front-end trading system, and Liffe operations will be fully integrated by the end of 2014 according to the statement.

The separation of the Liffe and Euronext is expected in the first quarter of 2014 and ICE will start moving Liffe agricultural commodity contracts in the summer of next year. Liffe equity derivativeS, including indices and single stock futures and options are expected to move in the third quarter and interest rates contracts in the fourth quarters.

In the middle of next year ICE plans to change the listing of Eurodollar and DTCC GCF Repo futures from Liffe US to the UK with clearing moving to ICE Clear Europe. The precious metals and MSCI equity index futures which are also listed on Liffe US, but cleared at the Options Clearing Corporation, will move to ICE Futures US and be cleared by ICE Clear US.

ICE Clear Europe plans to report all futures and options transactions executed on and cleared for ICE Futures Europe, ICE Endex and Liffe as well as all cleared OTC derivatives to ICE Trade Vault Europe.

Europe and US add to planned ICE repository services in Asia and Australia.

“We are evaluating the recently finalised Canadian rules for a potential repository offering,” added Tupper. “Following our recent acquisition of the Singapore Mercantile exchange, we are also reviewing reporting obligations and repository registration with the Monetary Authority of Singapore and we also have a provisional registration in Australia.”

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