ICE prepares London TTF mirror market as EU gas price cap approaches

Aura Sabadus


LONDON (ICIS)–The Intercontinental Exchange is planning to establish a parallel market for TTF natural gas futures and options transactions in London that will be activated in case an EU-imposed gas price cap is triggered, the company said in a statement on 27 January.

The alternative venue will be established on the London-based exchange ICE Futures Europe from 20 February, subject to completion of relevant regulatory processes.

TTF futures contracts on ICE Futures Europe will mirror those currently traded on the Dutch-based ICE Endex platform but will not be subject to the EU market correction mechanism regulation (MCM) and the related TTF price cap that were introduced by the EU in December 2022.

This is because the United Kingdom has been operating outside the EU jurisdiction since the full implementation of Brexit on 1 January 2021.

ICE said the TTF contracts held to expiry will be physically delivered at the Dutch Title Transfer Facility (TTF) virtual trading point.

“We are preparing an alternative venue in London to act as an insurance option for customers if the MCM prevents them from trading and adequately managing their risk exposure,” Trabue Bland, SVP, Futures Exchanges at ICE, said in the statement.


At the same time, ICE said its ICE Endex platform, as the world’s largest operator of TTF futures and options, was planning to change the rulebook so that transactions carried out under the EU jurisdiction align with the latest EU gas price cap.

The new rulebook will be effective on 15 February 2023, subject to completion of relevant regulatory processes.

Once the MCM regulation enters into force, the rules of ICE Endex will forbid market participants from submitting orders to the exchange order book in TTF derivatives above the price cap when the correction mechanism is activated, unless they are eligible to make use of the exemptions granted in the regulation, ICE said.

Details on the intended rulebook changes and guidance in respect of the MCM regulation can be accessed here .


In parallel, ICE Endex will continue to determine and publish settlement prices for all contracts listed on the exchange.

This means the existing methodology and approach used to determine and publish these prices will remain unchanged to ensure that settlement prices continue to reflect the fair and real market value of TTF futures and options contracts, ICE said.

As a result, the settlement prices of TTF futures and options may deviate from the price cap when it is not reflecting fair market value.

“We plan to implement the MCM on TTF contracts traded from ICE Endex in a manner that will preserve the market structure as best as possible,” Bland added.


In December EU energy ministers agreed a temporary gas price cap mechanism that could apply to all hubs across the EU unless the European Commission decides to opt-out certain hubs.

The price cap will enter into force on 15 February for a period of one year.

The ceiling will apply to front-month, month+2, month+3 and front-year contracts traded on exchanges but will not cover over-the-counter trade or spot transactions.

The market correction mechanism will be triggered if two conditions are fulfilled.

Firstly, the front-month TTF price exceeds €180/MWh for three consecutive working days. Secondly, the TTF price is more than €35/MWh above a reference LNG price over the same period.

FACTBOX – ICE issues guidance aligning TTF derivatives with price cap

The Intercontinental Exchange has published guidelines aligning TTF natural gas derivative transactions on its dedicated ICE Endex platform with the latest EU regulations introducing a gas price cap.

The latest guidance covers a range of topics such as the treatment of options and block trades, and lays down the steps to comply with the EU’s market correction mechanism agreed by the bloc in December 2022.

The MCM regulation requires all market participants to abstain from submitting trades for TTF derivatives above a dynamic limit. The market correction mechanism, which is due to come into force on 15 February, will be triggered if two conditions are fulfilled.

Firstly, the front-month TTF price exceeds €180/MWh for three consecutive working days. Secondly, the TTF price is more than €35/MWh above a reference LNG price over the same period.

The MCM regulation provides a number of exemptions to restrictions, which allow for certain orders to be placed above the dynamic limit.

As a result, the exchange will not be blocking the submission of all orders above the dynamic bidding limit. Instead, it will require members to comply with the MCM regulation. The exchange will carry out compliance and enforcement activities in case rules have been breached.

ICE recommends that market participants read the guidance in conjunction with the exchange’s existing market regulations as well as with the latest EU MCM rules.

Futures and options on natural gas are mainly exchange traded derivatives (ETDs). Around 75% are traded on regulated markets, while the remaining 25% are traded on the over-the-counter (OTC) market.

Dutch-based ICE Endex has the largest share, followed by EEX in Germany and to a limited extent by Nasdaq Oslo.

OTC traded products are exempt from complying with the MCM regulation.


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