ICE Futures Europe sets up Brent index oversight committee; licenses ICIS BFOE market data

North American multi-national network of electronic exchanges and clearing houses Intercontinental Exchange Inc (NYSE:ICE) has today announced that ICE Futures Europe, which is a London-based multi-asset class derivatives exchange, has established an Oversight Committee to oversee the administration of the ICE Brent IndexTM.

In addition, ICE Futures Europe has signed an agreement with ICIS, one of the world’s largest petrochemical and energy market information providers and a division of Reed Business Information which is part of Reed Elsevier Plc, to license its BFOE (Brent-Forties-Oseberg-Ekofisk) market data for the Brent IndexTM.

The Brent Index represents the average of trades in and assessments of the BFOE Cash (or forward) market in the relevant delivery month. Only published full cargo size (600,000 barrels) trades and assessments are taken into consideration in the calculation. The Brent Index is published by ICE Futures Europe on a daily basis at 12:00 noon London time and is used to create the final cash settlement price for ICE Brent futures at expiry.

Earlier this year, the UK Government’s Fair and Effective Markets Review recommended that the scope of UK benchmark legislation be extended to include several additional benchmarks, including the ICE Brent Index. Under the extended legislation, the Brent Index is a specified benchmark administered by ICE Futures Europe under the supervision of the Financial Conduct Authority (FCA).

The recently appointed Oversight Committee is responsible for monitoring and overseeing the administration of the ICE Brent Index including matters of definition and scope as well as exercising collective scrutiny of benchmark submissions as required.

The Oversight Committee enhances the governance and transparency of the Brent Index and comprises independent industry experts, Oil Price Reporting Agency (PRA) representation and ICE Futures Europe non-executive directors and representatives, including:

  • Grahame Cook, Independent Expert and Former Crude Oil Trading Manager, Integrated Supply & Trading, BP Oil International (Chair)
  • Phil Bruce, Independent Non-Executive Director, ICE Futures Europe
  • Christine Crosley, Independent Expert and Former Global Product Leader – Risk Management, Shell International Trading & Shipping
  • Mike Davis, Head of Market Development, ICE Futures Europe
  • Timothy Faithfull, Independent Non-Executive Director, ICE Futures Europe
  • David Peniket, President & Chief Operating Officer, ICE Futures Europe
  • Phil Redman, Senior Director, Market Oversight, ICE Futures Europe
  • Richard Street, Head of Regulation and Compliance, ICIS
  • Emma Vick, Director, Benchmark Administration, Intercontinental Exchange

As well as establishing the Oversight Committee, the Exchange plans to establish a Brent Index Advisory Group made up primarily of participants in the BFOE Cash Market which will be consulted on the development of the Brent Index.

As part of the daily compilation and publication of the ICE Brent Index, ICE Futures Europe is licencing ICIS BFOE assessment data which is produced five times a day in accordance with established ICIS methodologies. The ICIS BFOE assessment data complies with the standards and principles for PRAs set by the International Organization of Securities Commissions (IOSCO). ICIS BFOE data is audited annually; the most recent audit taking place in September 2014.

David Peniket, President and Chief Operating Officer, ICE Futures Europe, said: “The developments announced today form part of the ongoing evolution of ICE Brent to ensure it continues to meet market participants’ long term hedging requirements and remains the world’s leading crude oil futures contract. ICIS is an experienced and trusted provider of price assessments for the global oil market and we are pleased to subscribe to their data for the ICE Brent Index.”

For the official announcement from ICE, click here.

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