ICE warns to pull out of gas market.

Intercontinental Exchange has warned that it might pull its gas trading market out of the Netherlands if Brussels plans to introduce a cap on prices. The market, known as the Dutch Title Transfer Facility, is the region’s leading centre for trading and setting the price of gas and has become a symbolic issue as the bloc tries to respond to its broadening energy crisis. To quell the rapid rise in energy prices in the wake of Russia’s invasion of Ukraine, the EU has implemented a series of measures, including mandatory gas storage and consumption reduction targets. However, in a memo sent to member states yesterday and seen by the Financial Times, ICE warned that the rapid imposition of a cap would give no time for customers to adapt or for the market operator to test the system’s resilience and risk management systems.

A cap would likely force traders to immediately recalculate their prices, risks and costs, putting more significant strain on the market. «As a consequence, it is the responsibility of ICE as the market operator to consider all options if this mechanism is agreed, up to and including whether an effective market in the Netherlands is still viable,» the memo said. ICE has warned that gas traders would be forced to find another $47bn in margin payments, about double the levels they pay at present if a revised plan went ahead. The European Central Bank also warned last week that a cap could, «in some circumstances, jeopardise financial stability in the euro area».

In 2018, ICE transferred trading in hundreds of energy futures contracts from London to the US to help customers escape the burdens of new Mifid II rules governing European financial markets.

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