ICE Futures Abu Dhabi (IFAD) stands as an energy exchange based in the Middle East, backed by the ICE exchange operator. Recently, the exchange has managed to secure an Order of Registration from the US Commodity Futures Trading Commission.

Through doing so, the Abu Dhabi venue is now classified as a Foreign Board of Trade, or FBOT. This, in turn, provides investors located within the US with the ability to directly access its electronic trade matching and order entry systems.

Proving Itself For US Investor Support

The registration status was granted to the firm by the CFTC after it had concluded that IFAD had demonstrated attributes of an “established, organized exchange,” among other criteria. As one would imagine, this registration stands subject to comprehensive levels of oversight by the US regulator, with the supervision being comparable to how the CFTC oversees designated contract markets.

ICE Futures Abu Dhabi boasts the backing of not only the Atlanta-based ICE, but also nine other of the top energy trading firms in the world. As it stands now, IFAD is planning to host futures contracts, basing it on Murban crude oil. This oil gets produced by the national oil firm of the Emirates.

Many Big Names Involved

The exchange boasts minority stakes from names like GS Caltex, BP, JXTG, INPEX, PTT, PetroChina, TOTSA (Total), Shell, as well as Vitol. IFAD is currently working towards regulatory approvals needed to operate within key jurisdictions. If all goes smoothly, it’s expected that IFAD will begin its operations within 2021’s first quarter.

IFAD stands as the first market ICE can boast within the Middle East, and was established in 2019 in Abu Dhabi Global Market, or ADGM. Contracts that are traded within this exchange subsequently get cleared by way of its clearing arm based in London.

A total of 22 orders of registration to FBOTs has occurred ever since the Dodd-Frank Act was enacted, including ICE Futures Abu Dhabi.

Some Finer Details

FBOTs stand as non-US swap exchanges that are mandated to be registered with the CFTC. These registrations are, in turn, based on the Division of Market Oversight’s various recommendations they offer.

Without these approvals the CFTC gives, foreign exchanges can only gain access to investors based in the US by way of a time-limited relief. This relife serves primarily as an interim measure, or one that counts until the agency seeks out an order that exempts them from registration when it comes to swap clearing.