U.S. Markets

ICE allots $10 million for regulatory probes; earnings rise

(Reuters) - Intercontinental Exchange Inc ICE.N, which owns the New York Stock Exchange, said on Wednesday it has earmarked a $10 million "accrual" related to a regulatory probe into a nearly four-hour trading halt on the NYSE in July 2015, as well as other ongoing investigations.

FILE PHOTO: A screen displays the logo and ticker symbol for Intercontinental Exchange, Inc. on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 3, 2016. REUTERS/Brendan McDermid

ICE disclosed the amount in a regulatory filing after releasing its financial results for the first quarter.

The exchange and clearinghouse operator revealed in February that staff at the U.S. Securities and Exchange Commission had recommended an enforcement action over the outage at the Big Board, which was caused by a software glitch.

It was not known if the SEC approved the recommendation, or what the amount of any enforcement-related fine would be.

The SEC declined to comment.

ICE records “accruals for those matters in circumstances when a loss contingency is considered probable and the related amount is reasonably estimable,” the company said in the filing.

Stock trading is heavily reliant on technology, and exchange software issues can contribute to losses and harm investor confidence.

NYSE, which is in the process of moving all of its trading venues to a new technology platform called Pillar, most recently had a software glitch in March on its NYSE Arca exchange that prevented nearly 350 securities from completing a closing auction.

Previous SEC enforcement actions against exchanges have included a $10 million settlement with Nasdaq Inc NDAQ.O in 2013 over mistakes made during Facebook Inc's FB.O initial public offering.

The SEC also fined Bats Global Markets, now owned by CBOE Holdings CBOE.O, $14 million in 2015 over charges an exchange it acquired had given advantages to certain high-frequency trading firms.


ICE said its first-quarter earnings rose as higher financial futures volumes helped offset softer equities volumes and data revenues increased.

Net income attributable to ICE rose to $502 million, or 84 cents per share, from $369 million, or 62 cents per share, a year earlier.

Excluding acquisition-related expenses and other one-time items, ICE earned 74 cents a share, topping analysts’ average estimate by a penny, according to Thomson Reuters I/B/E/S.

Revenue increased to $1.16 billion from $1.15 billion, helped by an 9 percent rise in data revenue to $520 million.

ICE also said it sold its 12 percent stake in Brazil’s Cetip clearinghouse and that it would use the $438 million in net proceeds to pay down debt and share repurchases.

Reporting by John McCrank in New York; Editing by Jeffrey Benkoe