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Exchange-traded contracts: Sprecher talks his book

News that ICE is to relaunch its FX contracts gets a cool reception.

Jeff Sprecher, ICE

"We tend to be people that don’t really design contracts at ICE. We tend to react to what customers are telling us they need"

Jeff Sprecher, ICE

"Great. Just what the market needs. Another trading platform," was the cynical response from one market participant when he heard that Intercontinental Exchange (ICE) will list new variants on its existing currency futures on November 6. Given that the announcement coincided with initial reports that FXMarketSpace (FXMS), the joint venture formed by the CME and Thomson Reuters, was about to close, his cynicism, at least at first glance, appears more than justified. After all, ICE does not appear to be offering anything that is not already available. Super-fast trading platform? There are dozens of them already. A clearing house to mitigate credit risk? The CME already provides that and FXMS tried to extend the concept and failed. Larger-denominated contracts than the CME to bring it in line with the over the counter market? Eurex US tried that and failed.

However, ICE is one of the undoubted success stories of recent financial history and if you analyse what has made it successful, it is not new contracts but catering for client demand for efficiency.