CIRCULAR 11/080

15 July 2011

ICE Gasoil Futures Contract Quality Specification Proposal and Consultation (Second Phase)
The purpose of this Circular is to notify Members and their customers of the Exchange’s proposals with respect to: • changes to the ICE Gasoil Futures Contract quality specification from the January 2014 contract month onwards; the launch of an ICE Low Sulphur Gasoil Futures Contract (10ppm or 0.001% sulphur diesel) to run in parallel with the existing 1000ppm (0.1%) sulphur specification from the January 2012 contract month until and including December 2013; and a further consultation period in respect of these proposals.

Category: Trading

Attachments: ICE Gasoil (January 2014 onwards) and Low Sulphur Gasoil Quality Specification

Changes to the existing ICE Gasoil Futures Contract specification from January 2014 The Exchange proposes to change the existing 1000ppm (0.1% ) sulphur ICE Gasoil Futures Contract specification to one based on a 10ppm (0.001%) sulphur diesel barge specification The proposed quality specification is attached below. All other contract features including physical delivery in the ARA area (Amsterdam-Rotterdam-Antwerp, including Flushing and Ghent), expiry dates, contract lot and tick size will remain as at present. The contract will continue to be named ‘ICE Gasoil’ throughout the quality specification transition, and retain the physical code ‘G’. The Exchange proposes that the change in quality specification should be introduced with effect from the January 2014 contract month.

Summary of content: ICE Gasoil futures specification proposal, parallel Low Sulphur Gasoil contract launch and consultation

For more information please contact: Mike Davis Director, Market Development +44 (0) 20 7065 7753 mike.davis@theice.com

The Exchange believes that a 10ppm diesel specification constitutes the grade that will continue to be the most representative part of the wider European physical middle distillate market. This specification represents a highly liquid, fungible physical base, one with high and growing demand and many supply sources within Europe and globally. Any change to this proposal made in the light of market feedback will be made in a further announcement.

Launch of the ICE Low Sulphur Gasoil Futures Contract from Contract Month January 2012 In addition to the change to the quality specification for the existing ICE Gasoil Futures Contract for the January 2014 contract month and later, the Exchange also proposes to launch a contract with an identical 10ppm sulphur diesel barge specification to run in parallel with the existing 0.1% specification until expiry of the December 2013 contract month. This ‘parallel’ 10ppm contract will be called ICE Low Sulphur Gasoil (Physical code: ‘U LS’) and will run from the January 2012 contract and delivery month to those of December 2013.

ICE Futures, a Recognised Investment Exchange under the Financial Services & Markets Act 2000 Registered in England & Wales with Registered Office at Milton Gate, 60 Chiswell Street, London, EC1Y 4SA Company Registration No. 1528617

ICE Futures Europe Circular 11/080

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Pending the outcome of this consultation and a final announcement on Specification implementation. January 2015 onwards) until such announcement is made. the Exchange will consider representations that alternative specification elements and/or timings should be implemented in the alternative to the above proposals. and in parallel with the existing 0. will be identical to those of the ICE Gasoil Futures contract (Physical code: G) from January 2014 and thereafter. Consultation period Members are advised that in the light of the proposed changes above to the quality specification for ICE Gasoil from January 2014 and the proposed launch of a parallel ICE Low Sulphur Gasoil contract to run alongside the existing 0. to run between that point and December 2013 only. The quality specification of the parallel contract. a Recognised Investment Exchange under the Financial Services & Markets Act 2000 Registered in England & Wales with Registered Office at Milton Gate.1% specification from the January 2012 contract month. The new parallel 10ppm contract will be available for trade during September 2011. Signed: Patrick Davis Company Secretary ICE Futures. the Exchange will continue to suspend trading in all contract months after December 2014 (i. Please ensure that the appropriate staff within your organisation are advised of the content of this Circular. London. as currently).1% sulphur specification.com.e. until the expiry of the December 2013 contract months. telephone +44 20 7065 7753) by Friday 29 July 2011. 60 Chiswell Street. Members and their customers who have a view on the nature and extent of these proposed changes are invited to contact Mike Davis (mike. 1528617 ICE Futures Europe Circular 11/080 2 .davis@theice. EC1Y 4SA Company Registration No.In January 2014 therefore. the sole ICE Gasoil Futures Contract available will be ICE Gasoil (Physical code: G. This means that the 10ppm specification will be available continuously for trade from September 2011 (for Contract month January 2012). Following the conclusion of this second phase of the Consultation period on 29 July 2011 the Exchange intends to publish a final implementation notice on ICE Gasoil quality specifications and timing thereof.