CIRCULAR 11/142 - ICE

CIRCULAR
11/142
18 November 2011
Category:
Trading
Attachments:
None
Summary of content:
Additional Details:
Launch of ICE Brent
NX (New Expiry) Crude
Futures and Options
Contracts
For more information
please contact:
Mike Davis
Director,
Market Development
+44 (0)20 7065 7753
mike.davis@theice.com
Jean-Luc Amos
Oil Products Manager,
Market Development
+44 (0)20 7065 7744
jean-luc.amos@theice.com
Deborah Pratt
Director,
Oil Marketing
+44 (0)20 7065 7734
deborah.Pratt@theice.com
Jeff Barbuto
Vice President,
US Oil Marketing
+1 646 733 5014
jeff.Barbuto@theice.com
Julius Foo
Marketing Manager,
Asia Pacific
+65 6594 0162
julius.Foo@theice.com
Additional Details: Launch of ICE Brent NX (New Expiry)
Crude Futures and Options Contracts
Circular 11/132, dated 7 November 2011 notified Members of the
launch of ICE Brent NX (New Expiry) Crude Futures and Options (“ICE
Brent NX Futures and Options”). The purpose of this Circular is to
provide additional details in respect of these Contracts. ICE Brent NX
Futures and Options and related spreads will be made available for a
first trade date of Monday 5 December 2011:
• ICE Brent NX Futures and Options for a first Contract Month of
December 2012; and
• related on-screen futures spreads, including:
o
o
o
o
o
o
Brent NX / Brent (BNX-BRN)
Gasoil / Brent NX (The Gasoil NX Crack, GAS-BNX)
Low Sulphur Gasoil / Brent NX (The Low Sulphur
Gasoil NX Crack, ULS-BNX)
Brent NX / WTI (BNX-WBS)
RBOB / Brent NX (UHU-BNX)
Heating Oil / Brent NX (UHO-BNX)
Transition mechanisms: EFM facility
The Exchange is committed to encouraging an orderly transition of open
interest in the existing ICE Brent Crude Futures and Options Contracts
to ICE Brent NX Futures and Options during 2012. The Exchange will
provide two principal mechanisms to facilitate such transfers:
• the Brent NX / Brent (BNX-BRN) on screen futures spread
(noted above); and
• an Exchange of Futures for (related) Market facility (“EFM”).
The EFM facility will allow Members and their customers to exchange a
position in an existing ICE Brent Contract for an equivalent position in
ICE Brent NX Futures or Options. EFM transactions may be used only
to reduce positions in an existing ICE Brent contract and create or
increase a corresponding position in ICE Brent NX. The EFM facility will
be made available shortly after the launch of the Brent NX Contracts.
Further information, including confirmation of the launch date of the
facility will be provided in due course.
Contract outline
The Brent NX Crude Futures and Options Contracts will be quoted in
US dollars and cents per barrel. Like the ICE Brent Crude Futures
Contract, the ICE Brent NX Futures Contract is a deliverable contract
based on EFP delivery with an option to cash settle.
The Contract will be cleared by ICE Clear Europe.
A comprehensive set of Contract Specifications are available at:
ICE Futures Europe, a Recognised Investment Exchange ICE Futures Europe Circular 11/142
under the Financial Services & Markets Act 2000
Registered in England & Wales with Registered Office at
Milton Gate, 60 Chiswell Street, London, EC1Y 4SA
Company Registration No. 1528617 1

ICE Brent NX Crude Futures:
https://www.theice.com/productguide/ProductDetails.shtmlspecId=3775846
ICE Brent NX Crude Options:
https://www.theice.com/productguide/ProductDetails.shtmlspecId=3775848
ICE Brent NX Crude TAS, Singapore and Afternoon Minute Marker:
https://www.theice.com/publicdocs/futures/ICE_Settlement_Markers_Fact_Sheet.pdf
Contract Rules and Administrative Procedures
The Contract Rules and Administrative Procedures governing the
trading and delivery of the Contract are available at:
https://www.theice.com/FuturesEuropeRegulations.shtml
Listed contracts/periods
The table below sets out the contract periods which will be listed at
launch.
ICE Brent NX Crude
Period Futures Options
Months Up to 72 consecutive
months
(Initially 61 months
from December 2012
to December 2017)
Up to 24 consecutive
months (Initially Dec
2012 to Nov 2013)
Half yearly months
4 subsequent June
and December
contract months out
to 96 months
maximum (Dec 2019
initially)
The remaining
Jun/Dec contract
months (Dec 2013,
June and Dec 2014
to 2019 inclusive)
Expiry time and dates:
ICE Brent NX Crude Futures: Trading shall cease at the end of the
designated settlement period on the Business Day (a trading day which
is not a public holiday in England and Wales) immediately preceding the
25th calendar day preceding the first day of the contract month, or the
day prior to that if the 25 th calendar day is not a Business day. From the
March 2015 contract month trading shall cease on the last Business
Day (a trading day which is not a public holiday in England and Wales)
of the second month preceding the contract month.
ICE Brent NX Crude Options: Trading shall cease 3 Business Days (a
trading day which is not a public holiday in England and Wales) prior to
the expiration of the relevant future.
In the event that the applicable day for expiry purposes would be either:
(i) the Business day preceding Christmas Day, or (ii) the Business day
preceding New Year’s Day, then the Expiration Date/Last Trading Day
will move to the next preceding Business Day.
The full expiry calendar for the ICE Brent NX Futures and Options
contracts is available at:
https://www.theice.com/publicdocs/futures/ICE_Brent_NX_Expiry_Dates.pdf
ICE Futures Europe, a Recognised Investment Exchange ICE Futures Europe Circular 11/142
under the Financial Services & Markets Act 2000
Registered in England & Wales with Registered Office at
Milton Gate, 60 Chiswell Street, London, EC1Y 4SA
Company Registration No. 1528617 2

Trading hours (as at contract launch):
Monday - Friday
London Singapore Geneva New
York
Open 01:00
(23:00 on
Sunday)
09:00
(07:00 on
Sunday)
02:00
(00:00 on
Sunday)
20:00
(18:00 on
Sunday)
Chicago
19:00
(17:00 on
Sunday)
Close 23:00 07:00
(the next
day)
00:00
(the next
day)
18:00
(the next
day)
17:00
(the next
day)
* A circular will be issued when the UK switches from GMT to BST
and also when the US switches from DST which will affect the
opening and closing times.
EFP and EFS trades
Members may report EFP and EFS trades up to the close of business
each day. The reporting method is set out in the ICE Futures Europe
EFP/EFS Policy document available at:
https://www.theice.com/futures_europe.jhtml
This document will be updated to reflect the implementation of this
Contract.
PTMS-ECS contract codes and trade types:
PTMS-ECS
contract codes
Physical Contract
Logical Commodity
Generic Contract
ICE Brent NX Crude
Futures Options
BNX
BNX
F
BNX
BNX
F
EFP
EFS
Block Trade
Screen
TAS/TIC
Block TAS/TIC
PTMS-ECS
Trade Type
EFP
EFS
BLK
REG
TAS
TASB
Transaction charges
The per contract Exchange and Clearing fees will be consistent with
those for the existing Brent contracts: $0.82 per contract per side
(including clearing) for screen-executed transactions and $1.32 per
contract per side (including clearing) for Block Trades, EFPs and EFSs.
ICE Futures Europe, a Recognised Investment Exchange ICE Futures Europe Circular 11/142
under the Financial Services & Markets Act 2000
Registered in England & Wales with Registered Office at
Milton Gate, 60 Chiswell Street, London, EC1Y 4SA
Company Registration No. 1528617 3

Settlement price procedures and designated settlement period
Daily settlement prices will be determined in accordance with Trading
Procedure 2.4 which can be found at:
https://www.theice.com/publicdocs/contractregs/XX%20TRADING%20PROCEDURES.pdf
Margin rates
Initial margin rates for the contract will at the outset be the same as
those for the existing ICE Brent Futures and Options Contracts.
Margin rates for ICE Clear Europe Exchange-listed futures and
options, and for OTC contracts are available at:
https://www.theice.com/productguide/MarginRates.shtmlindex=&specId=3449058
https://www.theice.com/ClearEuropeSpanParameterFiles.shtml
Screen access
Participants permissioned for the ICE Brent Futures and Options will
automatically be permissioned for ICE Brent NX Futures and Options.
The new ICE Brent NX Futures, Options and related spreads will be
grouped into a new WebICE portfolio titled 'Brent NX’ where traders will
be able to access and incorporate the products selectively into their
existing screen portfolios as they wish. The ICE Brent NX portfolio will
automatically be created for any WebICE user who already has any ICE
Brent Future contract elements in their existing portfolio.
Traders accessing ICE Brent NX Futures contracts via a third-party
vendor should contact that vendor directly to ensure that the ICE Brent
NX product range (BNX) is coded and available on their screen from 5
December 2011.
API testing
The ICE Brent NX Contracts will shortly be available in the API test
environment.
Risk Limits and Clearing Access
The new ICE Brent NX contract and related spreads will be covered by
existing ICE Brent risk limits. If a trader has an existing clearing limit for
the existing ICE Brent Futures Contracts, that limit will apply in
aggregate also for trade in ICE Brent NX Futures. Those with a clearing
limit for an existing inter-contract spread between ICE Brent Crude
Futures and another contract will have the same limit in addition applied
to the new related spread. So, for example, a market participant with a
limit in the existing ICE Gasoil Crack (GAS-BRN) will have the same
limit in addition applied to the new ICE Gasoil NX Crack (GAS-BNX).
Traders wishing to execute volumes in the new contract that would
otherwise raise the total beyond their existing limits for ICE Brent
Futures should arrange to increase their limits via their Risk Manager
and/or Clearer as appropriate.
Members and their customers need to ensure they have the necessary
clearing limits in place to trade the ICE Brent NX Futures and Options
(see above). The contracts will be available in Credit Management and
Clearing Admin from 2 December 2011 and can be identified under the
following product names:
ICE Futures Europe, a Recognised Investment Exchange ICE Futures Europe Circular 11/142
under the Financial Services & Markets Act 2000
Registered in England & Wales with Registered Office at
Milton Gate, 60 Chiswell Street, London, EC1Y 4SA
Company Registration No. 1528617 4

Contract
ICE Brent NX Futures
ICE Brent NX Options
ICE Brent NX / Brent
(BNX-BRN)
Gasoil / Brent NX
(The Gasoil NX Crack)
Low Sulphur Gasoil / Brent NX
(The Low Sulphur Gasoil NX Crack)
Brent NX / WTI
RBOB / Brent NX
Heating Oil / Brent NX
Credit Management and
Clearing Admin Name
IPE e-Brent
Options-IPE e-Brent
BNX, BRN
GAS, BNX
ULS, BNX
BNX, WBS
UHU, BNX
UHO, BNX
Third party notification
Back office systems providers and Independent Software Vendors will
be notified simultaneously with the release of this Circular.
Please ensure that the appropriate staff within your organisation are
advised of the content of this Circular.
Signed:
Dee Blake
Director of Regulation
ICE Futures Europe, a Recognised Investment Exchange ICE Futures Europe Circular 11/142
under the Financial Services & Markets Act 2000
Registered in England & Wales with Registered Office at
Milton Gate, 60 Chiswell Street, London, EC1Y 4SA
Company Registration No. 1528617 5