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. ICE operates futures exchanges in the U.S., Europe, and Singapore. Its cash exchanges include the New York Stock Exchange (NYSE), NYSE ARCA, NYSE National, NYSE AMEX Options, NYSE ARCA Options, and NYSE Chicago. ICE also operates six central clearing houses: ICE Clear U.S., ICE Clear Europe, ICE Clear Singapore, ICE Clear Credit, ICE Clear Netherlands, 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.
  • 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.

ICE became a publicly traded company on November 16, 2005, and was added to the Russell 1000 Index on June 30, 2006.

Understanding the Intercontinental Exchange (ICE)

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. Compared with manual trading, the new platform provided greater price transparency, efficiency, liquidity, and had lower costs. Sprecher received backing from Goldman Sachs, Morgan Stanley, BP, Total, Shell, Deutsche Bank, and Societe Generale.

When it was founded, the company's primary focus was on energy products, specifically crude and refined oil, natural gas, power, and emissions. 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.

In response to the 2007-08 Financial Crisis, Sprecher formed ICE Clear Credit, which would serve as a clearing house for credit default swaps. ICE Clear Credit also served as the U.S. Federal Reserve's over-the-counter (OTC) derivatives clearing house, providing crucial risk management services for the market. ICE was the first to offer clearing services in the OTC energy and credit derivatives markets. By 2010, ICE had cleared more than $10 trillion in credit default swaps through its subsidiary, ICE Clear Credit.

ICE's company growth has primarily been achieved through the acquisition of other exchanges. Since its founding in 2010, some of the company's major acquisitions include the International Petroleum Exchange (IPE), now ICE Futures Europe, in 2001; the New York Board of Trade (NYBOT) in 2005, Winnipeg Commodity Exchange, now ICE Futures Canada, in 2007; the Creditex Group in 2008; European Climate Exchange (ECX) in 2010, NYSE Euronext in 2013; Interactive Data Corporation (IDC) in 2015, Standard & Poor's Securities Evaluations, Inc. in 2016; Virtu BondPoint in 2017; and the Chicago Stock Exchange (CHX) in 2018.

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 is 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.

ICE is the third-largest exchange group in the world, behind Hong Kong Exchanges and Clearing Limited (HKEX) and the CME Group Inc., which owns the Chicago Board of Trade and the New York Mercantile Exchange. In the year 2019, the company experienced $354 billion in new market capitalizations, all-total, across its exchange listings.