Opening for carbon trading swaps US 'financial overhaul' bank bill
- Update, 8/11/10, Chicago Climate Exchange staff cut by half, business slow, Reuters
- (Translation: Chicago Climate Exchange is losing money but owner is exploring new carbon trading swaps opportunities.)
"IntercontinentalExchange Inc. (ICE) is examining the future of its new U.S. emissions-trading business after the collapse of climate change legislation.
- The energy and commodity trading specialist acquired the Chicago Climate Exchange as part of its $597 million purchase of London-based Climate Exchange PLC, which also runs profitable emissions units in Europe.
"The business was built out with expectation that cap-and-trade in the U.S. was imminent," said Scott Hill, ICE's chief financial officer.
- Hill said when ICE started to examine its move into emissions trading it was not unreasonable to expect that the U.S. would pass legislation....
Chief Executive Jeff Sprecher said the Chicago-based unit of Climate Exchange is losing money, and ICE plans to scale back the operation and re-evaluate its future....
- Democrats in the U.S. Senate late last month laid aside plans to cap emissions and create a market for trading credits, indefinitely postponing a mandate that would drive more business to ICE's Chicago Climate Exchange as well as to rival platforms such as the Green Exchange, backed by CME Group Inc. (CME)....
ICE said it would take a charge of $4 million to $5 million related to staff reductions at the Climate Exchange, which it acquired in July....
- Sprecher said ICE and its credit brokerage subsidiary Creditex plan to seek status under new rules as a
- "swap execution facility" as the company looks to secure its position in off-exchange markets.
Registering under the new designation, laid out in
- financial overhaul legislation signed into law last month,
will see ICE join a race that has drawn in derivatives dealer banks and brokerage firms angling
- to control electronic trade in swaps and other
- complex financial instruments."...