ICE to expand interest rate futures offering

ICE will develop new repo-style interest rate futures contracts.

IntercontinentalExchange (ICE) is set to launch new interest rate futures contracts which allows short-term financing.

The ICE Funds Rate contract will offer “real-time transparency into the interest rate funding markets in a variety of currencies,” according to a release from the exchange.

The contracts are patent pending, and was developed and licensed by principal trading firm DRW.

ICE will also establish an advisory committee comprising of financial institutions and liquidity providers to help bring the contract to market later this year, subject to regulatory approval.

The Atlanta-based exchange will look to revive interest in trading repo-style futures contracts. It currently lists a US Treasury DTCC GCF repo index future contract, which was initially listed by NYSE Liffe in 2012.

The contract was launched to allow traders to hedge their interest rate exposure. However trading activity in the contract has ceased.

The move is similar to that of CME, which intended to launch a futures contract based on a US tri-party repo index calculated by BNY Mellon in 2015; however the contracts have yet to gain regulatory approval.