CFTC Permits ICE Futures Abu Dhabi to Trade Directly with Americans

ICE Futures Abu Dhabi, a Middle East-energy exchange backed by exchange operator ICE, has secured an Order of Registration from the US Commodity Futures Trading Commission. The registration allows the Abu Dhabi venue, which is now classified as a Foreign Board of Trade (FBOT), to provide investors located in the United States with direct access to its electronic order entry and trade matching systems.

The CFTC granted its registration status after the agency determined that IFAD demonstrated, among other things, that it has the attributes of “an established, organized exchange. It is subject to comprehensive oversight by its home country regulator whose supervision is comparable to that which the CFTC applies in its oversight of designated contract markets.”

ICE Futures Abu Dhabi is backed by Atlanta-based ICE alongside nine of the world’s top energy trading firms and is planned to host a futures contract based on Murban crude oil, which is produced by the emirate’s national oil firm.

BP, GS Caltex, INPEX, JXTG, PetroChina, PTT, Shell, TOTSA (Total) and Vitol had taken minority stakes in the exchange, which is currently working to secure the necessary regulatory approvals from key jurisdictions. Subject to receiving these licenses, the IFAD is expected to launch late in the first quarter of 2021.

A total of 22 orders of registration issued to FBOTs

Established in Abu Dhabi Global Market (ADGM), in 2019, the initiative is ICE’s first market in the Middle East and contracts traded on the exchange will be cleared through its London-based clearing arm.

Since the enactment of the Dodd-Frank Act, and with the addition of ICE Futures Abu Dhabi, the CFTC said it has issued a total of 22 orders of registration to FBOTs.

Foreign boards of trade, or FBOTs, are non-US swap exchanges registered with the CFTC based on the recommendations offered by the Division of Market Oversight.

In the absence of such approvals, foreign exchanges many only obtain access to US-based investors through a time-limited relief intended as an interim measure or until they seek a permanent order exempting them from registration with respect to swap clearing.

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