The Intercontinental Exchange underwent some dramatic changes in 2016. With the purchase of Interactive Data at the end of 2015, ICE spent last year integrating that company along with several others, giving the exchange a major footprint in the data, analytics and research space. ICE Chairman and CEO Jeff Sprecher sat down with JLN at the FIA Boca 2017 Conference to speak about that push as well as what’s next for the exchange.
“We spent a lot of our time integrating our data acquisitions, which were new to us, and finalizing the infrastructure that we have been building out for the New York Stock Exchange,” Sprecher said. “In 2017, we’re going to be able to take some of the things we’ve built now and put them into the marketplace. So that’s much more exciting.”
Sprecher and his team believe there is great opportunity in data and information because of the data exchanges produce naturally in terms of price, volume and other information, but also because of the growing demand for analytics and research as technology is able to absorb and use it quickly in trading strategies.
“Today, a trader is going to make a very informed decision when they are managing risk and are consuming a lot of information,” he said. “There are more algorithms, more checks and balances in the system before people make trading decisions, more regulatory and compliance oversight. All of that is part of an ecosystem we are a part of and feeding into that helps risk management and ultimately trading on our exchanges.”
One example is ICE’s tool that allows customers to use estimates and algorithms to determine where the bid and offer of a contract should be. Traders then can make a better decision on the price before trading it, and compliance teams can monitor them as well.
Sprecher said there are several challenges and opportunities facing the exchange on the geopolitical front in the US and Europe, as well as Brexit.
“All of these are inputs into risk management,” Sprecher said. “But they are also the opportunities for us as an industry.”