Fresh off its summer acquisition of the International Petroleum Exchange, the IntercontientalExchange (ICE)--an all-electronic, over-the-counter commodities market--has named Edwin Marcial its senior vice president and chief technology officer. Marcial, who has been promoted from his former post as a technology vice president, now has oversight of all of the ICE's technology projects--including, most significantly, the transition of the IPE's open-outcry-traded products to the ICE's trading engine.
When they struck their deal earlier this year, the floor-based IPE and the fully-automated ICE stated their intention to offer trading of OTC derivatives and regulated futures via a single electronic trading platform. But in order to do that, of course, the IPE must automate all of its regulated, floor-based futures products.
Marcial says that ICE has already begun preparations for the conversion, which will eventually result in the elimination of the IPE's floor. The exchange, he says, plans to migrate IPE's open-outcry products to ICE's Java-based trading engine in stages. The IPE trades a range of products, including brent, gas oil and natural gas, but Marcial declines to say which products will be the first to be moved off floor.
While he also refuses to specify the timeframe in which the transition is scheduled to to be completed, Marcial says the IPE conversion is only one of a handful of items on ICE's technology agenda. For example, he says, ICE is now building an interface that will connect its trading engine with the clearing system of the London Clearing House.
Via a deal it signed with the LCH back in August, ICE now plans to offer optional clearing services to its OTC market participants. In the past, says Marcial, after a trade was executed on ICE, the parties involved in that transaction were responsible for clearing and settling the trade themselves. But in the near future, through its link to the LCH's clearing platform, ICE's OTC market participants will have the ability to clear and settle ICE trades via an accredited clearinghouse. "I think it's a very attractive option, because it ties in well with (ICE) participants who want to achieve straight-through processing," says Marcial, noting that the ICE expects to finish the bridge to the LCH by the first quarter of next year.
Other technology projects on ICE's technology agenda include the launch of an electronic confirmations system and the development a new graphical user interface. The electronic confirmation application, says Marcial, will be rolled out in either late 2001 or early 2002, and will be targeted at ICE clients who want an automated mechanism for validating trades. The GUI is being built for ICE's Web site, as part of an effort to make the site more flexible and user-friendly.