Intercontinental Exchange (ICE): What the Company Does

Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, has grown from a niche energy trading platform into one of the largest exchange operators on the planet, with a market capitalization near $53.88 billion as of July 2022. Its rise says as much about consolidation in global markets as it does about the company itself.

At a Glance

• Founded in Atlanta in May 2000 by Jeffrey C. Sprecher to modernize energy commodity trading.
• Now owns the NYSE along with futures exchanges in Europe and Canada.
• ICE Clear Credit cleared more than $16.4 trillion in credit default swaps in the first quarter of 2022, up 9.7% year over year.
• Grown almost entirely through acquisitions, from the International Petroleum Exchange in 2001 to Black Knight in 2022.
• Ranked as the fourth largest exchange group globally in the 2021 FIA report, trailing CME Group, Brazil's B3, and India's National Stock Exchange.

How a Georgia Startup Reshaped Energy Trading

ICE began as an answer to a fairly narrow problem: over the counter energy trading was opaque, slow, and expensive. Sprecher built an electronic platform that gave traders better price visibility and cheaper execution than the phone based, manual systems that dominated the business at the time. The early product lineup centered on crude oil, refined products, natural gas, power, and emissions credits.

That single sector focus did not last long. ICE used a wave of acquisitions to pull in sugar, cotton, and coffee markets, foreign exchange trading, and equity index futures, turning what started as an energy shop into a diversified exchange operator spanning commodities and financial products alike.

Clearing Houses Born From Crisis

The 2007 to 2008 financial crisis exposed how little oversight existed in the credit default swap market, a gap that helped deepen the meltdown. Sprecher responded by setting up ICE Clear Credit, which the Federal Reserve approved as a bank in March 2009. Two years later it gained formal designation as a clearing house, regulated jointly by the CFTC and SEC.

The move mattered because ICE became the first operator to offer clearing services in both the OTC energy and credit derivatives markets, inserting a regulated middleman into transactions that had previously settled with far less transparency. The scale of that business is now considerable: ICE Clear Credit processed over $16.4 trillion in credit default swaps during the first quarter of 2022 alone.

Building an Empire Through Deals

Nearly every phase of ICE's growth traces back to a specific acquisition. The company bought the International Petroleum Exchange in 2001, which became ICE Futures Europe. The New York Board of Trade followed in 2005, then the Winnipeg Commodity Exchange (renamed ICE Futures Canada) in 2007, Creditex Group in 2008, and Climate Exchange in 2010.

The next decade brought even bigger targets. ICE acquired NYSE Euronext in 2013, instantly making it the owner of the New York Stock Exchange. Interactive Data Corporation came in 2015, followed by Standard & Poor's Securities Evaluations in 2016, Virtu BondPoint in 2017, the Chicago Stock Exchange in 2018, and Simplifile in 2019. More recently, ICE picked up Ellie Mae in 2020 and Black Knight in 2022, pushing further into mortgage technology and data, well beyond its original commodity trading roots.

Data Services as a Growth Engine

ICE launched ICE Data Services in June 2016, bundling real time pricing, valuations, analytics, reference data, and connectivity tools into a single offering. The NYSE itself relies on this data infrastructure, as do SuperDerivatives, Interactive Data, and a broad client base of financial institutions, asset managers, and individual investors. The unit also pulls in proprietary data from global exchanges and fixed income markets, giving ICE a revenue stream that runs parallel to its trading and clearing businesses rather than competing with them.

Where Does the Intercontinental Exchange Go From Here?

ICE has never stayed still for long, and the Ellie Mae and Black Knight deals suggest mortgage technology is now as central to its strategy as futures trading once was. Whether that diversification keeps pace with rivals like CME Group and B3 will depend on how well ICE integrates these newer businesses alongside its exchange and clearing operations.

Live crude oil price and chart →