Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Both IntercontinentalExchange Group Inc. (ICE - Analyst Report) and CME Group Inc. (CME - Analyst Report) announced the receipt of approval from the European Securities and Markets Authority’s (ESMA) to have their own trade repository in Europe. A trade repository or swap data repository is an authoritative electronic platform that registers key information regarding open over-the-counter (OTC) derivative trading.

These regulations are part of the mandates under the European Market Infrastructure Regulation (EMIR), which require swap derivatives to be channelized through clearinghouses and increase databases in order to generate transparency in the swaps market.

Hence, such trade repositories are built to better collect and understand information of the fluctuations in trade prices and volumes. This process will also help the exchange clients to determine the swaps that can be cleared, which again can aid in minimizing defaults.

Europe’s EMIR is similar to the U.S. Commodity Futures Trading Commission (CFTC). In Jun 2012, ICE had launched ICE Trade Vault as the first swap data repository (SDR) that received approval from the CFTC. Since then, ICE Trade Vault U.S. has accepted over 17 million trades. On the other hand, CME Group operates in the U.S. through one of only three swap data repositories which were authorized in Nov 2012.

Accordingly, ICE Trade Vault Europe and CME European Trade Repository have been given the green signal to submit trades across all authorized derivative asset classes that include interest rates, foreign exchange (FX), credit, commodities and equities.

Moreover, the trade repositories of both ICE and CME Group will be able to accept cleared and non-cleared, bilaterally settled, OTC and exchange-traded derivatives (ETDs) executed on venues anywhere in the world.

The attainment of the approval in Europe opens an array of opportunities for both the companies. It will also provide both ICE and CME Group with the required swiftness and reliability for their OTC derivatives.

It is assured that the stringent regulations passed in the last couple of years were only to minimize risk and maintain stability. Hence, the exchange giants — ICE and CME Group had been constantly modifying its infrastructure to suit the new regulations, which further justifies the granted approvals.

While ICE carries a Zacks Rank #2 (Buy), CME Group holds a Zacks Rank #3 (Hold). Other better-ranked financial stocks include Bofl Holdings Inc. (BOFI - Snapshot Report) and Hilltop Holdings Inc. (HTH - Analyst Report), both of which carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%