−Removed: We are a provider of marketplace infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities.
+Added: We are a provider of market infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities.
These products, which span major asset classes including futures, equities, fixed income and U.S.
−Removed: residential mortgages, provide our customers with access to mission critical workflow tools that are designed to increase asset class transparency and workflow efficiency.
+Added: residential mortgages, provide our customers with access to mission critical tools that are designed to increase asset class transparency and workflow efficiency.
While we report our results in three reportable business segments, we operate as one business, leveraging the collective expertise, particularly in data services and technology, that exists across our platforms to inform and enhance our operations.
• In our Exchanges segment, we operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities.
−Removed: • In our Fixed Income and Data Services segment, we provide fixed income pricing, reference data, indices and execution services as well as global credit default swaps, or CDS, clearing and multi-asset class data delivery solutions.
+Added: • In our Fixed Income and Data Services segment, we provide fixed income pricing, reference data, indices, analytics and execution services as well as global credit default swaps, or CDS, clearing and multi-asset class data delivery solutions.
• In our Mortgage Technology segment, we provide an end-to-end technology platform that offers customers comprehensive, digital workflow tools that aim to address the inefficiencies that exist in the U.S.
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By staying close to our customers, we have expanded into new asset classes and services, while retaining a core mission of reducing friction in markets, bringing efficiency to our customers’ workflows and, ultimately, connecting our customers to opportunity.
−Removed: Today, we are a Fortune 500 company, providing our customers with an array of marketplace infrastructure, data services and technology solutions that span a diverse set of asset classes.
+Added: Today, we are a Fortune 500 company, providing our customers with an array of market infrastructure, data services and technology solutions that span a diverse set of asset classes.
Our Business Segments
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We operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities, such as commodities, interest rates, foreign exchange and equities as well as corporate and exchange-traded funds, or ETFs.
−Removed: We operate multiple trading venues, including 12 regulated exchanges and six clearing houses, which are strategically positioned in major market centers around the world, including the U.S., U.K., European Union, or EU, Canada and Singapore.
−Removed: Our ICE Exchanges segment includes the New York Stock Exchange and other registered securities exchanges, or collectively, the NYSE, our global futures network, trading and listings revenue, and various data and connectivity services that are directly related to those exchange platforms.
+Added: We operate multiple trading venues, including 13 regulated exchanges and 6 clearing houses, which are strategically positioned in major market centers around the world, including the U.S., U.K., European Union, or EU, Canada, Asia Pacific and the Middle East.
+Added: Our Exchanges segment includes trading and listings revenue from our global futures network and the New York Stock Exchange and other registered securities exchanges, or collectively, the NYSE, and various data and connectivity services that are directly related to those exchange platforms.
Revenues reflect a mix of both diversified transaction revenues and recurring data and listings revenues.
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We offer a range of futures and options products that are designed to enable our customers to manage their risk across global energy markets.
−Removed: Our flagship Brent crude oil contract serves as the cornerstone of a global oil network that today includes over 600 related crude and refined oil products including locational and refined spreads.
+Added: Our flagship Brent crude oil contract serves as the cornerstone of a global oil network that today includes nearly 700 related crude and refined oil products including locational and refined spreads.
In addition, as natural gas and Liquefied Natural Gas, or LNG, continue to globalize, we offer the broadest footprint of regional and global natural gas benchmarks, which span North America, Europe and Asia.
Our leading environmental and power markets round out our diverse global energy network.
−Removed: For nearly two decades, our environmental markets have provided customers that are increasingly subject to carbon cap and trade programs and renewable fuel standards the risk management tools to meet those obligations and to manage risk related to climate change.
+Added: For nearly two decades, our environmental markets have provided customers risk management tools to meet carbon cap and trade program requirements and renewable fuel standards.
+Added: Increasingly, market participants are turning to our global
+Added: environmental markets to help navigate and manage risk related to climate change, the energy transition and the move to net zero emissions.
• Agricultural & Metals Futures and Options:
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These contracts range from established global benchmarks, such as the MSCI® Emerging Market Index, to newer products, such as MSCI®’s suite of Environmental, Social and Governance, or ESG, indices and the NYSE FAANG+ Index.
−Removed: Our global interest rate complex spans geographies, currencies and tenors, providing participants around the world with effective tools to manage risk in a capital efficient manner.
−Removed: Key products include:
+Added: Our global interest rate complex spans geographies, currencies and tenors, providing participants around the world with tools to manage risk in a capital efficient manner.
+Added: Key products during 2021 included:
Short Sterling, Euribor, Gilts, Sterling Overnight Index Average, or SONIA, and Secured Overnight Financing Rates, or SOFR, among others.
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These markets serve issuers, investors and other market participants across five cash equity and two options markets.
−Removed: As the global leader in listings, the NYSE has been the venue of choice for innovators, visionaries and leaders for over 225 years.
−Removed: At the heart of the NYSE offering is our unique hybrid market model that combines leading technology with an accountable market maker to provide human judgment, an unmatched community of the world’s greatest companies and premium brand visibility.
+Added: The NYSE has been the venue of choice for innovators, visionaries and leaders for over 225 years.
+Added: The NYSE offers a unique hybrid market model that combines leading technology with an accountable market maker to provide human judgment, a community of the world’s greatest companies and premium brand visibility.
With over 70% of S&P 500 companies listed on the NYSE as of December 31, 2021, we are the leading listing venue across a range of sectors from technology and healthcare, to financials and energy.
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• Data and Connectivity Services:
−Removed: Our exchanges' trade execution services create trading data.
Our exchange data services include, among other offerings, proprietary real-time and historical pricing data, as well as order book and transaction information related to our global futures markets and the NYSE exchanges.
In addition, we receive a share of revenue from the sale of consolidated U.S.
−Removed: equity market data by the National Market System Plans, or NMS Plans.
+Added: equity and options market data by the National Market System Plans, or NMS Plans.
Separately, we also provide connectivity services directly related to our futures, cash equity and options exchanges and clearing houses.
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Our over-the-counter, or OTC, markets include bilateral energy markets that offer electronic trading of contracts based on physically-settled natural gas, power and refined oil contracts.
−Removed: Our other revenues primarily include interest income on certain clearing margin deposits related to our futures business, as well as revenue related to our digital asset initiative, Bakkt.
+Added: Our other revenues primarily include interest income on certain clearing margin deposits related to our futures business, as well as revenue related to our digital asset initiative, Bakkt, until it merged with VPC Impact Acquisition Holdings, or VIH, in October 2021.
We operate six clearing houses, each of which acts as a central counterparty, or CCP, that, for its clearing members, becomes the buyer to every seller and the seller to every buyer.
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Mechanisms have been created, called guaranty funds, to provide partial protection in the event of a clearing member default.
−Removed: With the exception of ICE NGX Canada Inc., or ICE NGX, each of the ICE Clearing Houses requires that each clearing member make deposits into a guaranty fund maintained by the relevant ICE Clearing House.
−Removed: In addition, we have contributed $408 million of our own cash to the guaranty funds included in the table below, and such amounts are at risk and could be used in the event of a clearing member default.
−Removed: In September 2019, we also added a layer of insurance to our clearing member default protection.
−Removed: The default insurance has a three-year term that commenced on September 17, 2019, for the following clearing houses in the following amounts:
−Removed: ICE Clear Credit - $50 million;
+Added: With the exception of ICE NGX Canada Inc., or ICE NGX, each of the ICE Clearing Houses (as defined below) requires that each clearing member make deposits into a guaranty fund maintained by the relevant ICE Clearing House.
+Added: In addition, we have contributed $398 million of our own cash to the guaranty funds which is one component of the table below, and such amounts are at risk and could be used in the event of a clearing member default.
+Added: We also maintain default insurance as an additional layer of clearing member default protection, which is also reflected in the table below.
+Added: The default insurance was added in September 2019 and has a three-year term that commenced on September 17, 2019 for the following clearing houses in the following amounts:
ICE Clear Europe - $75 million;
−Removed: and, ICE Clear US - $25 million.
−Removed: In addition, and included in the table below, ICE NGX maintains a guaranty fund of $100 million funded by a letter of credit issued by a major Canadian bank.
−Removed: If an ICE NGX clearing member defaults and its collateral is insufficient, the shortfall should be covered by a draw down on the letter of credit following which ICE NGX would file a claim under the default insurance.
−Removed: Under the default insurance policy, ICE NGX is responsible for the first $15 million and then can recover additional losses up to $100 million.
+Added: ICE Clear US - $25 million;
+Added: and ICE Clear Credit - $50 million.
+Added: In addition, the table below includes a guaranty fund of $115 million maintained by ICE NGX funded by the following:
+Added: (1) a $100 million letter of credit issued by a major Canadian chartered bank, and backed by default insurance underwritten by Export Development Canada, a Crown corporation operated at arm’s length from the
+Added: Canadian government, and (2) $15 million, which is included in our total cash contribution of $398 million, held as restricted cash to fund the first loss amount ICE NGX is responsible for under the default insurance policy.
Our contributions to each clearing house as of December 31, 2021 are listed below and our clearing houses are referred to herein collectively as “the ICE Clearing Houses”:
−Removed: Clearing House Products Cleared Location Exchange where Executed Reporting Segment ICE's Guaranty Fund Contribution
+Added: Clearing House Products Cleared Location Exchange where Executed Reporting Segment ICE's Contribution
ICE Clear Europe Energy, agricultural, interest rates and equity index futures and options contracts and OTC European CDS instruments U.K.
−Removed: ICE Futures Europe, ICE Futures U.S., ICE Endex, and third-party venues Exchanges $312 million
+Added: ICE Futures Europe, ICE Futures U.S., ICE Endex, ICE Futures Abu Dhabi and third-party venues Exchanges $322 million
ICE Clear U.S.
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• Fixed Income Data and Analytics:
−Removed: We are a leading provider of evaluated end-of-day and real-time pricing services on roughly three million fixed income securities spanning approximately 151 countries and 73 currencies including sovereign, corporate and municipal bonds, mortgage and asset-backed securities as well as leveraged loans.
+Added: We are a leading provider of evaluated end-of-day and real-time pricing services on approximately three million fixed income securities spanning approximately 150 countries and 80 currencies including sovereign, corporate and municipal bonds, mortgage and asset-backed securities as well as leveraged loans.
Our reference data offering complements our evaluated pricing by providing our clients a broad range of descriptive information, covering millions of financial instruments that, when coupled with our pricing services, act as the foundation for our leading fixed income index complex, ICE Data Indices, LLC, or ICE Data Indices.
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Alongside our leading Fixed Income Data and Analytics offerings, ICE Bonds is focused on providing tools to improve efficiency in customers' workflows across fixed income markets.
−Removed: ICE Bonds provides customers with electronic markets that support multiple fixed income trading protocols including:
+Added: ICE Bonds provides
+Added: customers with electronic markets that support multiple fixed income trading protocols including:
click-to-trade, request for quotation, or RFQ, and auctions, including portfolio auctions/trading.
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• Other Data and Network Services:
−Removed: Revenues include those related to the ICE Global Network and our consolidated feeds business, as well as desktops and other multi-asset class analytics.
+Added: We offer a multi-asset class connectivity solution called the ICE Global Network.
The ICE Global Network offers highly secure, low latency connectivity solutions to reach over 150 trading venues and over 750 data sources.
−Removed: Our consolidated feeds business provides data from a broad array of trading venues and news feeds through a common application programming interface, or API.
−Removed: Our Desktops and Tools support commodity and energy traders, risk managers, financial advisors, wealth managers and retail traders, and includes a robust instant messaging, or IM, system that protects the privacy of over 100,000 users, while also enabling greater collaboration.
+Added: In addition, our consolidated feeds business provides data from a broad array of trading venues and news feeds through a common application programming interface, or API.
+Added: Finally, our desktop solutions support commodity and energy traders, risk managers, financial advisors, wealth managers and retail traders, and include a robust instant messaging, or IM, system that protects the privacy of nearly 110,000 users, while also enabling greater collaboration.
Other Data and Network Service revenues are largely recurring in nature.
Mortgage Technology Segment
−Removed: Over the last four years, ICE has constructed an end-to-end network aimed at identifying and solving the inefficiencies that exist in the U.S.
+Added: Over the last five years, ICE has constructed an end-to-end network aimed at identifying and solving the inefficiencies that exist in the U.S.
residential mortgage market.
From application through closing and the secondary market, our network is intended to connect the key stakeholders across the mortgage origination workflow and provide our customers with data services and technology that deliver greater transparency and enable significant customer efficiency gains.
−Removed: Our Mortgage Technology segment generated revenues of $595 million in 2020 and accounted for 10% of our consolidated revenues, less transaction-based expenses.
+Added: Our Mortgage Technology segment generated revenues of $1.4 billion in 2021 and accounted for 20% of our consolidated revenues, less transaction-based expenses.
• Origination Technology:
−Removed: Revenues include those related to our Encompass offering, our proprietary and comprehensive mortgage origination platform, which served nearly 45% of all closed residential mortgage loans in the U.S.
−Removed: in 2019, based on the most recent Home Mortgage Disclosure Act data.
−Removed: Our origination technology acts as a system of record for mortgage transactions, automating the gathering, reviewing, and verifying of mortgage-related information and enabling automated enforcement of rules and business practices designed to ensure that each completed loan transaction is of the highest quality and adheres to secondary market standards.
−Removed: Revenue from Origination Technology is based on recurring Software as a Service, or SaaS, subscription fees, with an additive “Success-Based Pricing” fee as lenders exceed the number of loans closed that is included with their monthly base subscription.
−Removed: • Network and Closing Solutions:
−Removed: Our network is a leading marketplace that provides customers connectivity to the mortgage supply chain and facilitates the secure exchange of information between our customers and a broad ecosystem of our own proprietary offerings and third-party service providers, in addition to lenders and investors that are critical to consummating the millions of loan transactions that occur on our origination network each year.
−Removed: Key services include:
−Removed: credit, title, appraisal, flood, compliance, mortgage insurance and fraud detection, among others.
−Removed: In addition, our Encompass Investor Connect offering allows loan originators to electronically submit loan files to investors, providing investors with electronic access to the large number of mortgage originators that rely on our origination technology helping to reduce frictions between buyers and sellers of mortgage loans.
−Removed: Our closing network uniquely connects key participants, such as lenders, title and settlement agents and individual county recorders together, in order to digitize the traditionally manual and paper-based closing and recording process.
−Removed: Our closing solutions also include digital services related to the Mortgage Electronic Registration Systems, Inc., or MERS, eRegistry, which are intended to help to drive process efficiencies for lenders, investors and servicers, while enabling a better consumer experience for borrowers, as we seek to build more of a straight-forward closing experience.
−Removed: Revenues from Network and Closing Solutions are based largely on the number of applications and closed loans that utilize the various services.
+Added: Our proprietary and comprehensive mortgage origination platform, Encompass, acts as a system of record for the mortgage origination, automating the gathering, reviewing, and verifying of mortgage-related information and enabling automated enforcement of rules and business practices designed to help ensure that each completed loan transaction is of high quality and adheres to secondary market standards.
+Added: These revenues are based on recurring Software as a Service, or SaaS, subscription fees, with an additive Success-Based Pricing fee as lenders exceed the number of loans closed that is included with their monthly base subscription.
+Added: In addition, the ICE Mortgage Technology Partner Network provides originators connectivity to the mortgage supply chain and facilitates the secure exchange of information between our customers and a broad ecosystem of proprietary offerings, third-party service providers and lenders and investors that are critical to consummating the millions of loan transactions that occur on our origination network each year.
+Added: Revenue from the ICE Mortgage Technology Partner Network is largely transaction-based.
+Added: • Closing Solutions:
+Added: Our closing solutions uniquely connect key participants, such as lenders, title and settlement agents and individual county recorders, to digitize the traditionally manual and paper-based closing and recording process.
+Added: Our closing solutions also include revenues from the Mortgage Electronic Registration Systems, Inc., or MERS, database, which provides a leading system for recording and tracking changes in mortgage servicing rights and beneficial ownership interests in loans secured by U.S.
+Added: residential real estate as well as Simplifile LC, a leading provider of electronic signing and recording technology and services.
+Added: Revenues from closing solutions are largely transaction-based.
• Data and Analytics:
−Removed: Revenues include those related to ICE Mortgage Technology’s Automation, Intelligence, Quality, or AIQ offering, which applies machine learning and artificial intelligence, or AI, to the entire loan origination process, offering customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities.
−Removed: AIQ also enables a series of AI-driven origination tasks and real-time risk analysis that are intended to further improve customer workflow efficiency.
+Added: ICE Mortgage Technology’s Automation, Intelligence, Quality, or AIQ, offering applies machine learning and artificial intelligence, or AI, to the entire loan origination process, offering customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities.
+Added: AIQ also enables a series of AI-driven origination tasks and real-time risk analysis using tools called analyzers that are intended to further improve customer workflow efficiency.
AIQ aims to help investors make loan purchases faster, by reducing operational costs and lowering buy-back risk through the application of AI to the purchase review process.
AIQ revenues can be both recurring and transaction-based in nature.
−Removed: In addition, ICE Mortgage Technology’s data offerings include real-time industry and peer benchmarking tools, which provide originators a granular view into the real-time trends of nearly half the U.S.
+Added: In addition, our Mortgage Technology’s data offerings include real-time industry and peer benchmarking tools, which provide originators a granular view into the real-time trends of nearly half the U.S.
residential mortgage market.
1 unchanged sentence
Revenues related to our data products are largely subscription based and recurring in nature.
−Removed: • Registrations and Other:
−Removed: Our MERS database is the industry’s leading system of record for recording and tracking changes in mortgage servicing rights and beneficial ownership interests of loans secured by U.S.
−Removed: residential real estate.
−Removed: We also offer certain professional services and ancillary products.
−Removed: These revenues are transaction-based.
+Added: Other revenues include professional services fees and ancillary products.
+Added: These revenues can be both recurring and transaction-based in nature.
Product and Services Development
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We are continually developing, evaluating and testing new products to better serve our client base.
−Removed: The majority of our product development relates to evaluating new contracts, new data sets or new analytic offerings.
+Added: The majority of our product development relates to evaluating new contracts, new data sets, new analytic offerings or new mortgage technologies.
New contracts often must be reviewed and approved by relevant regulators.
−Removed: We expect to continue to invest in improving our ICE Global Network and software services to meet the needs of our customers and improve their trading and connectivity experience by reducing latency, improving security and providing the most relevant information and data.
+Added: We expect to continue to invest in improving our data distribution and software services to meet the needs of our customers and improve their trading and connectivity experience by reducing latency, improving security and providing the most relevant information and data.
While we primarily develop our products and services internally, we also periodically evaluate and enter into strategic partnerships and licensing arrangements to develop new products and services.
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Where feasible, we design and build our own systems and write our own software programs since we believe that having control over our technology allows us to be more responsive to our customers’ needs, better support the dynamic nature of our business, provide the highest quality technology and deliver relevant, timely and actionable data to the markets and customers we serve.
−Removed: • ICE and NYSE Trading Platforms and Technology:
+Added: • Trading Platforms and Technology:
The ICE trading platform supports trading in our cleared futures and options markets as well as our bilateral OTC markets.
1 unchanged sentence
Speed, reliability, resilience, capacity and security are critical performance criteria for electronic trading platforms.
−Removed: Connectivity to our trading platform for our markets is available through our web-based front-end applications, as well as multiple independent software vendors, or ISVs, and APIs.
−Removed: The NYSE electronic trading platform features an open system architecture that allows users to access our system via one of the many front-end trading applications developed by ISVs.
+Added: Connectivity to our trading platform for our markets is available through our web-based front-end applications, as well as independent software vendors, or ISVs, and APIs.
+Added: The NYSE electronic trading platform features an open system architecture that allows users to access our system via front-end trading applications developed by ISVs.
+Added: We developed core technology and architecture known as NYSE Pillar and have migrated all our Cash Equity Securities markets, Security Information Processor, or SIP, and Options Price Reporting Authority, or OPRA, platforms to this architecture.
For equity options, we offer a hybrid model of electronic and open outcry trading through NYSE American Options and NYSE Arca Options.
−Removed: We developed an integrated trading platform and matching engine known as NYSE Pillar and have migrated all of our cash equity securities markets to this platform.
−Removed: We also expect to migrate our equity options markets to this platform, which have historically operated on distinct platforms.
+Added: We also expect to migrate our equity options markets to NYSE Pillar, which have historically operated on distinct platforms.
This integrated platform is expected to improve performance and reduce the complexity of operating multiple trading systems.
• Clearing Technology:
−Removed: A broad range of trade management and clearing services are offered through the integrated technology infrastructure that serves our clearing houses.
−Removed: The ICE clearing systems encompass a number of integrated systems, including post-trade position management, risk management, settlement and treasury and reporting functions.
−Removed: A core component of our derivatives clearing houses is the risk management of clearing firm members.
+Added: A broad range of clearing and risk management services are offered through the integrated technology infrastructure that serves our clearing houses.
+Added: ICE clearing technology is an integrated service-oriented platform that enables post-trade management, position management, management of the clearing house risk waterfall, contract settlement and treasury management functions.
+Added: The primary focus of our derivatives clearing houses is the risk management of clearing members throughout all facets of the position management and settlement lifecycles.
Our extensive technology and rules-based risk systems provide analytical tools that allow us to determine margin, evaluate credit risk and monitor the trading activities and overall risk of clearing members.
−Removed: • ICE Data Services Technology:
+Added: • Data Services Technology:
ICE Data Services technology uses integrated platforms to capture, store and process information, perform analytics and maintain connectivity solutions using a single configurable data capture mechanism and flexible delivery capability.
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In addition, the technology underpinning our ICE Global Network supports scalable bandwidth and a wide variety of connectivity options including fiber, wireless, colocation and hosting.
−Removed: • ICE Mortgage Technology :
+Added: • Mortgage Technology :
The ICE Mortgage Technology platform enables lenders to originate, process, fund and deliver residential mortgages using various applications, APIs, data products and other services offered.
−Removed: is developed using industry-leading software technologies and third-party services, including hosting with a combination of public cloud and private data centers.
−Removed: The platform is integrated with multiple services necessary for loan origination, such as credit reporting and other services that lenders leverage through our network, which is offered through the platform.
−Removed: The platform includes industry leading information security infrastructure to protect the confidentiality and integrity of our customer data.
+Added: The platform is developed using industry-leading software technologies and third-party services, including hosting with a combination of public cloud and private data centers.
+Added: The platform is integrated with multiple services necessary for
+Added: loan origination, such as credit reporting and other services that lenders leverage through our network, which is offered through the platform.
+Added: The platform includes industry leading information security infrastructure to protect the confidentiality and integrity of our customers' data.
We operate regionally diverse primary and backup data centers and maintain comprehensive business continuity and disaster recovery plans and facilities.
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Asset theft often involves organized crime or financially motivated nations staging sophisticated, well-planned campaigns to steal significant cash, cryptocurrency, or equivalent assets.
−Removed: Our thematic threats, along with others, are evaluated by our Board of Directors as well as our Risk Committee, Chief Risk Officer and Chief Information Security Officers, or CISOs.
+Added: Our thematic threats, along with others, are evaluated by our Board of Directors as well as our Risk Committee, Chief Risk Officer and Chief Information Security Officer, or CISO.
The CSS provides the framework we use for assessing risk, prioritizing testing, identifying remedial actions and validating improvements.
4 unchanged sentences
• Governance and Leadership:
−Removed: Our Information Security department is led by our CISOs, who provide comprehensive reports to a dedicated internal governance committee at least quarterly outlining threat assessment, control performance, and ongoing enhancements.
+Added: Our Information Security department is led by our CISO, who provides comprehensive reports to a dedicated internal governance committee at least quarterly outlining threat assessment, control performance, and ongoing enhancements.
Additionally, cybersecurity matters are reported to and discussed with a cross-subsidiary leadership committee, the Risk Committee of our Board of Directors, and when applicable, subsidiary boards.
−Removed: Our CISOs and other senior security leaders conduct periodic cybersecurity education sessions with our employees and directors.
+Added: Our CISO and other senior security leaders conduct periodic cybersecurity education sessions with our employees and directors.
These sessions cover general cybersecurity topics as well as specific details regarding our cybersecurity program.
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The nature of our business activities mandates an emphasis on sabotage and asset theft as primary threats in addition to contemporary themes of data theft.
−Removed: Our focus on these threats leads to an emphasis on network
−Removed: security, social engineering controls, behavioral detection of insider threat, and deliberate and rehearsed recovery strategies.
+Added: Our focus on these threats leads to an emphasis on network security, social engineering controls, behavioral detection of insider threat, and deliberate and rehearsed recovery strategies.
Intellectual Property
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We believe that our employee population should reflect the broader communities within which we operate.
−Removed: We hold ourselves accountable via quarterly and annual data reporting to senior management, data reporting to our Board of Directors, and transparency in reporting data to our stakeholders via our annual Corporate Responsibility Report.
+Added: We hold ourselves accountable via quarterly and annual data reporting to senior management, data reporting to our Board of Directors, and transparency in reporting data to our stakeholders via our annual Sustainability Report.
Employee development is an important element of our human capital management program.
2 unchanged sentences
We monitor voluntary attrition rates carefully, and over the past three years, our attrition rates have remained lower than the benchmarks in the finance and technology sectors.
−Removed: We review this data frequently and strive to transparently report this information to our stakeholders via our Corporate Responsibility Report.
−Removed: Financial education is the cornerstone of our corporate giving efforts, which include support for organizations such as Junior Achievement in the U.S.
−Removed: and Young Money in the U.K.
−Removed: We also underwrite a digital financial education curriculum that is delivered at no cost to grade school and high school students in Chicago, Boston, New York and Atlanta.
+Added: We review this data frequently and transparently report this information to our stakeholders via our Sustainability Report.
+Added: Financial education is the cornerstone of our corporate giving efforts, which include support for several organizations.
+Added: We also underwrite a digital financial education and data sciences curriculum that is delivered at no cost to grade school and high school students in the U.S.
We make additional charitable contributions throughout the communities where we have offices and our employees are encouraged to do the same, including through an annual match to employees for charities of their choice.
−Removed: We raised the annual match to $3,500 per employee in 2020 to encourage and reward our employees' charitable contributions during a difficult year due to COVID-19.
+Added: We offer an annual match of $3,500 per employee to encourage and reward our employees' charitable contributions.
Corporate Citizenship
We strive to create long-term value for our stockholders and meet sustainability goals for all of our stakeholders.
−Removed: That includes maintaining high ethical and business standards, giving back in the communities where we live and work and
−Removed: using our unique resources to bring together a network of the world's leading companies to learn from each other and exchange ideas on a broad range of issues, including those related to environmental, social and governance matters.
−Removed: Much of our approach is driven by the core values that make up our culture.
−Removed: During 2020, we surveyed our employees to assess how we, as a company, were living up to our core values, and are taking actions based on the results of the survey to further our embodiment of our core values.
−Removed: For additional information, please refer to the Corporate Citizenship section of our website at www.theice.com/esg.
+Added: That includes maintaining high ethical and business standards, giving back in the communities where we live and work and using our unique resources to bring together a network of the world's leading companies to learn from each other and exchange ideas on a broad range of issues, including those related to environmental, social and governance matters.
+Added: For additional information, please refer to the ESG section of our website at www.ice.com/esg.
Our Competitive Strengths
16 unchanged sentences
We believe our key strengths include our:
−Removed: • Diverse Product Offerings:
−Removed: In our Exchanges segment, many of our futures contracts serve as global benchmarks for managing risk relating to exposure to price movements in the underlying products, including financial, energy and agricultural commodities.
−Removed: For example, we are a leading provider of global energy risk management products, ranging from global crude and refined oil products, to an array of global natural gas benchmarks and environmental markets.
−Removed: In our Fixed Income and Data services segment, we offer customer solutions that span their workflows including pre-trade analytics, an array of execution protocols, and post-trade services all designed to improve asset class transparency and bring efficiency to customers' workflows.
−Removed: In our Mortgage Technology segment, we provide customers with a comprehensive loan origination platform and network of third-party service providers, which we believe are critical to the underwriting, processing and closing of U.S.
−Removed: residential mortgage loans.
−Removed: (1) Revenue mix based on 2020 revenues and are pro-forma for Ellie Mae.
−Removed: Ellie Mae pro forma revenues for 2020 were $608 million for the period prior to our acquisition of Ellie Mae.
−Removed: • Risk Management Expertise:
−Removed: We offer a range of central clearing and related risk management services to promote the liquidity and security of our markets in jurisdictions around the world and to meet local regulatory and operational needs in key financial market centers.
−Removed: The credit and performance assurance provided by our clearing houses to clearing members is designed to substantially reduce counterparty risk and is a critical component of our exchanges’ identities as reliable and secure marketplaces for global transactions.
−Removed: Our clearing houses are designed to protect the financial integrity of our markets by maintaining strong governance and rules, managing collateral, facilitating payments and collections, enhancing capital efficiency and limiting counterparty credit risk.
−Removed: In our Mortgage Technology segment, our origination technology network acts as a system of record for mortgage transactions, automating the gathering, reviewing, and verifying of mortgage-related information, that in addition to other benefits, is intended to enable automated enforcement of rules and business practices that are designed to adhere to secondary market standards.
• Data Services:
+Added: Across all three of our segments and our various networks, our data services aim to address the rising demand for independent, real-time information, which is being driven by regulation, market fragmentation and competition, increasing technology and data demands, increasing automation, as well as passive investing and indexation.
+Added: We also believe our data services are uniquely relevant to our clients’ business operations and provide tools and services that enable greater workflow efficiency and, regardless of market conditions, are relied upon to serve the need for continuous information and analysis.
– In our Exchanges segment, we offer proprietary real-time and historical pricing data, as well as order book and transaction information related to our global futures markets and the NYSE.
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Our reference data offering complements our evaluated pricing by providing our clients with a broad range of descriptive information, covering millions of financial instruments that, when coupled with our pricing services, act as the foundation for our leading fixed income index complex.
−Removed: Across all three of our segments and our various networks, our data services aim to address the rising demand for independent, real-time information, which is being driven by regulation, market fragmentation and competition, increasing technology and data demands, as well as passive investing and indexation.
−Removed: We also believe our data services are uniquely relevant to our clients’ business operations and provide tools and services that enable greater workflow efficiency and, regardless of market conditions are relied upon to serve the need for continuous information and analysis.
−Removed: • Broad Distribution:
−Removed: We operate multiple trading venues, including 12 regulated exchanges, as well as six clearing houses, which are strategically-positioned in major market centers around the world, including the U.S., U.K., EU, Canada and Singapore.
−Removed: Our ICE Global Network provides connectivity to over 150 trading venues and data from over 750 data sources, including ICE-operated markets and data services.
−Removed: Through our fixed income execution, data and analytics offerings, we serve over 5,000 customers across global fixed income markets.
−Removed: At ICE Mortgage Technology, we have at least one product relationship with nearly every key industry participant from loan originators to settlement agents and local jurisdictions within the U.S., which represent over 85% of the U.S.
+Added: – In our Mortgage Technology segment, our AIQ offering applies machine learning and artificial intelligence to the entire loan origination process, offering customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities.
+Added: AIQ also enables a series of artificial intelligence-driven origination tasks and real-time risk analysis using tools called analyzers that are intended to further improve customer workflow efficiency.
+Added: In addition, our Mortgage Technology’s data offerings include real-time industry and peer benchmarking tools, which provide originators a granular view into the real-time trends of nearly half the U.S.
+Added: residential mortgage market.
• World Class Technology:
Our proprietary systems are built using state-of-the-art technology and are designed to support our customers' workflows across the networks we operate.
−Removed: We employ a significant number of employees in
−Removed: technology-related activities, including product management, system architecture, software development, network engineering, server maintenance and continuity, cybersecurity, system and data performance, systems analysis, quality assurance, database administration and customer technical support.
+Added: We employ a significant number of employees in technology-related activities, including product management, system architecture, software development, network
+Added: engineering, server maintenance and continuity, cybersecurity, system and data performance, systems analysis, quality assurance, database administration and customer technical support.
Speed, reliability, resilience, capacity and security are critical performance criteria for our electronic networks.
−Removed: Connectivity to all of our platforms is available through our web-based front-end application, as well as multiple ISVs and APIs.
+Added: • Risk Management Expertise:
+Added: We offer a range of central clearing and related risk management services to promote the liquidity and security of our markets in jurisdictions around the world and to meet local regulatory and operational needs in key financial market centers.
+Added: The credit and performance assurance provided by our clearing houses to clearing members is designed to substantially reduce counterparty risk and is a critical component of our exchanges’ identities as reliable and secure marketplaces for global transactions.
+Added: Our clearing houses are designed to protect the financial integrity of our markets by maintaining strong governance and rules, managing collateral, facilitating payments and collections, enhancing capital efficiency and limiting counterparty credit risk.
+Added: In our Fixed Income and Data Services segment, we provide mission critical price transparency for nearly three million fixed income securities globally.
+Added: Our fixed income customers rely on our data, indices and analytics to inform pre-trade decision making, support post-trade regulatory and compliance needs and improve operational efficiency.
+Added: In our Mortgage Technology segment, our origination technology network acts as a system of record for mortgage transactions, automating the gathering, reviewing, and verifying of mortgage-related information, that in addition to other benefits, is intended to enable automated enforcement of rules and business practices that are designed to adhere to secondary market standards.
+Added: • Broad Distribution:
+Added: We operate multiple trading venues, including 13 regulated exchanges, as well as 6 clearing houses, which are strategically positioned in major market centers around the world, including the U.S., U.K., EU, Canada, Asia Pacific and the Middle East.
+Added: Our ICE Global Network provides connectivity to over 150 trading venues and data from over 750 data sources, including ICE-operated markets and data services.
+Added: Through our fixed income execution, data and analytics offerings, we serve thousands of customers across global fixed income markets.
+Added: In our Mortgage Technology segment, we have at least one product relationship with nearly every key industry participant from loan originators to settlement agents and local jurisdictions within the U.S., that represent over 85% of the U.S.
+Added: • Diverse Product Offerings:
+Added: In our Exchanges segment, many of our futures contracts serve as global benchmarks for managing risk relating to exposure to price movements in the underlying products, including financial, energy and agricultural commodities.
+Added: For example, we are a leading provider of global energy risk management products, ranging from global crude and refined oil products, to an array of global natural gas benchmarks and environmental markets.
+Added: In our Fixed Income and Data Services segment, we offer customer solutions that span their workflows including pre-trade analytics, an array of execution protocols, and post-trade services all designed to improve asset class transparency and bring efficiency to customers' workflows.
+Added: In our Mortgage Technology segment, we provide customers with a comprehensive loan origination platform and network of third-party service providers, which we believe are critical to the underwriting, processing and closing of U.S.
+Added: residential mortgage loans.
The markets in which we operate are highly competitive.
−Removed: We face competition in all aspects of our business from a number of different enterprises, both domestic and international, including traditional exchanges, electronic trading platforms, investment banks, data vendors, voice brokers and other technology providers.
+Added: We face competition in all aspects of our business from a number of different enterprises, both domestic and international, including traditional exchanges, electronic trading platforms, investment banks, data vendors, voice brokers, and mortgage and other technology providers.
Exchanges Segment
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We also face competition from large investment banks, brokers and customers that may assume the role of principal and act as counterparty to orders originating from retail customers, or match their respective order flows through bilateral trading arrangements, including through internalization of order flow.
−Removed: NYSE Arca and NYSE American Options face considerable competition in the equity options markets;
+Added: NYSE Arca Options and NYSE American Options face considerable competition in the equity options markets;
their principal U.S.
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Mortgage Technology Segment
−Removed: • In our ICE Mortgage Technology business, we compete with other digital mortgage solution providers, such as Black Knight, Inc.'s origination technologies and proprietary systems that lenders have put in place.
+Added: • In our ICE Mortgage Technology business, we compete with other digital mortgage solution providers and proprietary systems that lenders have put in place.
We also compete for mortgage activity that does not utilize digital solutions.
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We seek to advance our leadership position by focusing our efforts on the following key strategies for growth:
−Removed: • innovate and expand our data services offerings and the networks we serve to address the rising demand for transparency and efficiency;
+Added: • innovate and expand the networks we serve to address the rising demand for transparency and efficiency;
• further develop our technology and risk management infrastructure while also increasing our distribution;
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The record consolidated revenues, less transaction-based expenses, we achieved in 2021 reflect our focus on the implementation and execution of our long-term growth strategy.
−Removed: Innovate and Expand Our Data Services Offerings and the Networks We Serve to Address the Rising Demand for Transparency and Efficiency
−Removed: Our growth strategy has been to expand the networks we serve by, in part, adding new data, connectivity and other workflow tools.
−Removed: By bringing together a wide range of data and analytics as well as an array of delivery mechanisms, we offer customers a comprehensive and flexible solution to address the need for more transparency, efficiency and information across their respective workflows.
+Added: Innovate and Expand the Networks We Serve to Address the Rising Demand for Transparency and Efficiency
+Added: Our growth strategy has been to expand the networks we serve by, in part, adding new data, technology, connectivity and other workflow tools.
+Added: By bringing together leading technology with a wide range of data and analytics, as well as an array of delivery mechanisms, we offer customers a comprehensive and flexible solution to address the need for more transparency, efficiency and information across their respective workflows.
Our growth has been driven by many factors, such as increased automation, regulation and demand for independent, secure, real-time information.
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We develop and maintain our own infrastructure, electronic trading platforms, clearing systems, mortgage platforms and data and analytics platforms, which are designed to ensure scalability and the delivery of technology that meets our expanding customer base’s demands for price transparency, reliability, risk management and transaction efficiency.
−Removed: We intend to continue to increase ease of access and connectivity with our existing and prospective customers.
−Removed: We expect to continue rolling out NYSE Pillar, our new integrated equities trading platform and matching engine, to our equity options markets to improve performance and reduce the complexity of operating multiple trading systems.
−Removed: We also expect to continue to invest in mortgage technology to streamline and automate more workflows and build new capabilities.
−Removed: We operate systems that support trading, clearing, mortgage originations, data and analytics across five data centers.
−Removed: Finally, we operate our ICE Global Network, which provides connectivity to over 150 trading venues and data from over 750 sources, including ICE-operated markets and data services.
−Removed: Our derivatives customer base has grown and diversified as a result of several drivers, including the addition of new markets and products, the move toward increased risk management and counterparty credit management, mark-to-market and margining services as well as regulatory requirements.
+Added: The systems that we operate support trading, clearing, mortgage originations, data and analytics across many data centers.
+Added: We expect to continue to develop our exchange technologies, including rolling out NYSE Pillar, our new integrated equities trading platform and matching engine, to our equity options markets to improve performance and reduce the complexity of operating multiple trading systems.
+Added: We also expect to continue to invest in mortgage technology to streamline and automate more workflows and build new capabilities, such as eClose and AIQ analyzers.
+Added: Finally, we expect to add content and build new analytics to enable further electronification in fixed income markets.
+Added: Our customer base has grown and diversified as a result of several drivers, including the addition of new asset classes and products, the move toward increased risk management and increased automation, regulation and demand for independent, secure, real-time information.
We continue to add new participants to our platforms, which bring additional demand for new products and services.
−Removed: Our markets support price transparency and risk management, particularly in times of volatility and for products where there is less liquidity.
−Removed: In addition, the use of hedging, trading and risk management programs by commercial enterprises continues to rise based on the availability of technology to deliver more products, as well as the security and the capital efficiencies offered by clearing.
We develop new products, but have also increased our capabilities through licenses and acquisitions of companies and intellectual property.
−Removed: Further, by acquiring, building and maintaining our own geographically diverse clearing operations, we are able to respond to market demand for central clearing and related risk management services across diverse geographic and regulatory jurisdictions.
−Removed: As new markets evolve, we intend to leverage our domain knowledge to meet additional demand for cleared products and related risk management solutions.
−Removed: As requirements for regulatory compliance and capital efficiencies grow, the use of clearing and data, particularly from independent data and benchmark providers also continues to grow.
−Removed: We intend to continue to expand our customer base by leveraging our existing relationships and our global sales and marketing team to promote participation in our markets, and by expanding our range of products and services.
−Removed: Strengthen Competitive Position Through Select Acquisitions and Strategic Relationships
+Added: We intend to continue to increase the ease of access and connectivity with our existing and prospective customers and expand our customer base by leveraging our existing relationships and our global sales and marketing team to promote participation on our platform, and by expanding our range of products and services.
+Added: Strengthen Our Competitive Position Through Select Acquisitions and Strategic Relationships
We were an early consolidator in global markets and we intend to continue to explore and pursue acquisitions and other strategic opportunities to strengthen our competitive position globally, broaden our product offerings and services and support the growth of our company while enhancing stockholder value as measured by return on invested capital, earnings accretion and cash flow growth.
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In addition to growing our business, we may enter into these transactions for a variety of additional reasons, including leveraging our existing strengths to enter new markets or related asset classes, expanding our products and services, diversifying our business, addressing underserved markets, advancing our technology and anticipating or responding to regulatory or other potential changes in our industry or other industries.
−Removed: For example, in September 2020, we acquired Ellie Mae to expand our ICE Mortgage Technology portfolio.
−Removed: Through its digital lending platform, Ellie Mae provides technology services to participants in the mortgage supply chain, including its over 3,000 customers and thousands of partners and investors who provide market liquidity on its open network.
+Added: For example, in September 2020, we acquired Ellie Mae, Inc., or Ellie Mae, to expand our
+Added: mortgage technology portfolio.
+Added: Through its digital lending platform, Ellie Mae (now known as ICE Mortgage Technology), provides technology services to participants in the mortgage supply chain, including its over 3,000 customers and thousands of partners and investors who provide market liquidity on its open network.
Information About Our Executive Officers
−Removed: Information relating to our executive officers is included under “Information About Our Executive Officers” in Part III, Item 10, “Directors, Executive Officers and Corporate Governance” of this Annual Report.
+Added: Information relating to our executive officers is included under “Executive Officers” in Part III, Item 10, “Directors, Executive Officers and Corporate Governance” of this Annual Report.
Our activities and the markets in which we operate are subject to regulations that impact us as well as our customers, and, in turn, meaningfully influence our activities, the manner in which we operate and our strategy.
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Accordingly, our U.S.
−Removed: securities exchanges are regulated by the SEC and, in turn, are the regulators of their
+Added: securities exchanges are regulated by the SEC and, in turn, are the regulators of their members.
As national securities exchanges, NYSE, NYSE Arca, NYSE American, NYSE National and NYSE Chicago must comply with, and enforce compliance by their members with, the Securities Exchange Act of 1934, or the Exchange Act.
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ICE Securities Execution & Clearing, LLC, a full clearing member of the National Securities Clearing Corporation, the Fixed Income Clearing Corporation and The Depository Trust Corporation, provides correspondent clearing for ICE Bonds and is subject to oversight by the SEC, FINRA and the MSRB.
−Removed: • Our U.K.-based execution-oriented fixed income market is operated by Creditex Brokerage, L.L.P., which is an operator of a multilateral trading facility, or MTF, and ICE Markets Limited, which acts as the matched principal counterparty to transactions arranged on the MTF operated by Creditex Brokerage.
−Removed: Both Creditex Brokerage and ICE Markets Limited are regulated by the U.K.’s Financial Conduct Authority, or FCA.
−Removed: Additionally, in connection with its bond offerings, Creditex Brokerage is authorized to provide automated trading services in Hong Kong and is subject to oversight by the Hong Kong Securities and Futures Commission and holds an Australian Market License and is subject to oversight by the Australian Securities and Investment Commission.
+Added: • Our U.K.-based execution-oriented fixed income market is operated by Creditex Brokerage, L.L.P., which is an operator of a multilateral trading facility, or MTF, and ICE Markets Limited, which acts as the matched principal counterparty to bond transactions arranged on the MTF operated by Creditex Brokerage.
+Added: Both Creditex Brokerage and ICE Markets Limited are regulated and authorized by the U.K.’s Financial Conduct Authority, or FCA.
+Added: Creditex Brokerage is authorized to provide automated trading services in Hong Kong, Singapore and Switzerland and is subject to regulatory oversight by national competent authorities in each jurisdiction.
Regulation of our Data Business
We have a U.S.
−Removed: subsidiary that is registered with the SEC under the Investment Advisers Act of 1940, or the Investment Advisers Act, for its evaluated pricing services.
+Added: subsidiary that is registered with the SEC under the Investment Advisers Act of 1940, or the Investment Advisers Act, for its evaluated pricing and other advisory services.
The Investment Advisers Act imposes numerous regulatory obligations on registered investment advisers, including those relating to the management and distribution of products and services, record-keeping, compliance oversight, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities.
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ICE Data Indices applies the International Organization of Securities Commissions, or IOSCO, Principles for Financial Benchmarks to its indices.
−Removed: ICE Data Indices has been recognized as a third-country benchmark administrator by the FCA under the U.K.
+Added: ICE Data Indices is recognized as a third-country benchmark administrator by the FCA under the U.K.
Benchmarks Regulation, or U.K.
ICE Benchmark Administration Limited, or IBA, is authorized and regulated by the FCA for the regulated activity of administering a benchmark, and is authorized as a benchmark administrator under the U.K.
−Removed: On December 31, 2020, IBA was authorized as a benchmark administrator under the EU Benchmarks Regulation, or EU BMR.
See “Regulatory Changes” below for more information.
Regulation of our Mortgage Business
−Removed: We have a mortgage technology business, Ellie Mae, that is subject to examination by the Federal Financial Institutions Examination Council, or the FFIEC, and its member agencies because it is a third-party service provider to financial institutions directly regulated by the FFIEC and its member agencies, including, among others, the Consumer Financial Protection Bureau, or CFPB.
+Added: We have a mortgage technology business, ICE Mortgage Technology (formerly known as Ellie Mae), that is subject to examination by the Federal Financial Institutions Examination Council, or the FFIEC, and its member agencies because it is a third-party service provider to financial institutions directly regulated by the FFIEC and its member agencies, including, among others, the Consumer Financial Protection Bureau, or CFPB.
+Added: In addition, our mortgage technology business processes a significant amount of consumer financial information on behalf of mortgage lenders and as a result is subject to a variety of U.S.
+Added: state and federal regulations governing the protection of consumer financial information.
Regulatory Changes
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Our key areas of focus on these evolving efforts are:
−Removed: • Brexit implications.
−Removed: On January 1, 2021, the U.K.
−Removed: completed its withdrawal from the EU, commonly referred to as Brexit.
−Removed: As a result, as of January 1, 2021, EU law no longer applies in and to the U.K.
−Removed: In connection with the completion of the U.K.'s withdrawal, the U.K.
−Removed: and EU finalized a trade and cooperation agreement, which was provisionally applied as of January 1, 2021.
−Removed: The trade and cooperation agreement does not cover financial services.
−Removed: Instead, the U.K.
−Removed: and EU issued a joint declaration on financial services regulatory cooperation.
−Removed: According to the joint declaration, the U.K.
−Removed: and EU should agree on a Memorandum of Understanding establishing the framework for regulatory cooperation on financial services.
−Removed: • Requirement that European and U.K.
−Removed: exchanges and CCPs offer non-discriminatory access.
−Removed: The non-discriminatory access provisions of the U.K.'s Markets in Financial Instruments Directive II, or U.K.
−Removed: MiFID II, and the EU Markets in Financial Instruments Directive II, or EU MiFID II, would require both our U.K.
−Removed: exchanges and CCPs to offer access to third parties on commercially reasonable terms.
−Removed: In addition, both the U.K.
−Removed: MiFID II and the EU MiFID II could require our U.K.
−Removed: and European exchanges and CCPs to allow participants to trade and/or clear at other venues, which may encourage competing venues to offer lookalikes of our products.
−Removed: On July 3, 2020, the application of these non-discriminatory access requirements for EU exchange-traded derivatives under EU MiFID II was postponed until July 3, 2021.
−Removed: This postponement did not form part of EU law retained by the U.K.
−Removed: at the end of the Brexit transition period.
−Removed: Treasury is currently reviewing the suitability of these requirements for U.K.
• Continued access by EU market participants to U.K.
CCPs and exchanges .
−Removed: The European Commission, or EC, adopted an 18-month temporary equivalence decision for U.K.
+Added: The European Commission adopted an 18-month temporary equivalence decision for U.K.
CCPs, which began to apply as of January 1, 2021.
−Removed: ICE Clear Europe has been recognized by ESMA as a third-country CCP in accordance with the European Markets Infrastructure Regulation, or EMIR.
−Removed: Separately, ICE Futures Europe and ICE Endex will continue to be able to permit access by EU and U.K.
−Removed: persons to transact on their platforms.
+Added: Based on this temporary equivalence, ICE Clear Europe has been recognized by ESMA as a third-country CCP in accordance with the European Markets Infrastructure Regulation, or EMIR.
+Added: In November 2021, the European Commission announced that it will propose an extension of the equivalence decision applying to U.K.
+Added: CCPs in early 2022.
+Added: In December 2021, ESMA published its comprehensive review of the systemic importance of ICE Clear Europe,
+Added: currently designated as a Tier 2 CCP, and determined not to issue a recommendation for derecognition.
+Added: ESMA instead proposed that measures be considered by relevant EU institutions and authorities to mitigate risks related to Tier 2 CCP clearing services identified as being of substantial systemic importance to the EU (including services provided by ICE Clear Europe).
+Added: ESMA also proposed regulatory and supervisory measures that incentivize EU clearing participants and clients to reduce their exposures towards Tier 2 CCPs and enhancements to ESMA’s supervisory powers.
+Added: Separately, ICE Futures Europe will continue to be able to permit access to its platform from relevant EU jurisdictions and ICE Endex will continue to be able to permit access to its platform from the U.K.
The absence of an equivalence decision by the EU for U.K.
trading venues, however, may result in increased costs for certain EU market participants, which could impact trading on ICE Futures Europe.
−Removed: The impact to our business and the potential for regulatory changes remain uncertain at this time.
−Removed: We are monitoring the impact to our business and are evaluating avenues to facilitate continued access for EU and U.K.
−Removed: customers to ICE Futures Europe and ICE Endex.
+Added: Additional impacts to our business and the potential for regulatory changes remain uncertain at this time.
• Regulatory structure applicable to non-EU clearing houses.
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ESMA has recognized ICE Clear Europe as a third-country CCP under EMIR and determined that it is a Tier 2 CCP on the basis that it is systemically important to the financial stability of the EU or one or more of its Member States.
−Removed: However, ESMA's continuing implementation of these delegated regulations could still impact one or more of our other non-EU clearing houses.
−Removed: • Basel III capital charges.
−Removed: The implementation of capital charges in Basel III could have a negative impact on certain of our clearing members.
−Removed: In particular, the Supplemental Leverage Ratio applicable to certain financial institutions may impose capital requirements on certain of our clearing house members and their customers that may raise the costs and thus discourage financial institutions from client clearing.
−Removed: In June 2019, the Basel Committee on Banking Supervision revised its treatment of the leverage ratio capital requirement for derivatives that a bank centrally clears on behalf of its clients.
−Removed: The revised treatment will permit both cash and non-cash forms of initial margin and variation margin received from a client to offset the replacement cost and potential future exposure for client cleared derivatives only.
−Removed: The revision will apply to the version of the leverage ratio standard that will serve as the Pillar 1 minimum capital requirement as of January 1, 2022.
−Removed: In November 2019, the Federal Reserve Board, the Federal Deposit Insurance Corporation, or FDIC, and the Office of the Comptroller of the Currency finalized rule changes to the derivative exposure calculations and leverage ratio requirements.
−Removed: The final rule also revised the treatment of the leverage ratio capital requirement for derivatives that a bank centrally clears on behalf of its clients to permit both cash and non-cash forms of initial margin and variation margin received from a client to offset the replacement cost and potential future exposure for client cleared derivatives only.
−Removed: The compliance date for the revised regulation is January 1, 2022, however early adoption was permitted beginning April 1, 2020.
+Added: ESMA has recognized all other ICE clearing houses as third-country CCPs and determined that they are Tier 1 CCPs on the basis that they are not systemically-important to the financial stability of the EU or one or more of its Member States.
+Added: ESMA's continuing implementation of these delegated regulations could still impact one or more of our other non-EU clearing houses.
+Added: • Requirement that European and U.K.
+Added: exchanges and CCPs offer non-discriminatory access.
+Added: The non-discriminatory access provisions of the U.K.'s Markets in Financial Instruments Directive II, or U.K.
+Added: MiFID II, and the EU Markets in Financial Instruments Directive II, or EU MiFID II, required both our U.K.
+Added: and EU exchanges and CCPs to offer access to third parties on commercially reasonable terms.
+Added: In May 2021, the U.K.
+Added: Treasury concluded that the non-discriminatory access requirements for exchange-traded derivatives were not suitable in a U.K.-only context and the requirements were removed.
+Added: With regard to EU MiFID II, in November 2021, the European Commission proposed that non-discriminatory access for exchange traded derivatives be removed from Markets in Financial Instruments, or MiFIR, regulation.
+Added: • Brexit implications.
+Added: As of January 1, 2021, EU law no longer applies in and to the U.K.
+Added: In connection with the completion of the U.K.'s withdrawal from the EU, the U.K.
+Added: and EU finalized a trade and cooperation agreement, which is now in force.
+Added: The trade and cooperation agreement does not cover financial services.
+Added: The EU and U.K.
+Added: declared an intention to continue discussions to agree on a memorandum of understanding, or MoU, on financial services cooperation.
+Added: This MoU, once signed and ratified by both parties, will establish a Joint U.K.-EU Financial Regulatory forum, which will serve as a platform to facilitate dialogue on financial services issues.
+Added: There continues to be uncertainty surrounding specific terms that may impact the financial services industry and our business operations.
• Capital requirements for investment firms acting as market makers.
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investment firms.
−Removed: The proposed rules risk imposing disproportionate capital requirements on EU and U.K.
−Removed: investment firms acting as market makers.
−Removed: investment firms may be discouraged from acting as market makers on certain markets operated by ICE Futures Europe and ICE Endex due to the increased capital requirements.
+Added: The proposed rules introduce new prudential requirements tailored to the activities and risks faced by investment firms.
+Added: We are monitoring the potential impact of these new rules on investment firms acting as market makers on certain markets operated by ICE Futures Europe and ICE Endex.
• Financial transaction and similar taxes.
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• Benchmarks Regulation.
−Removed: In June 2016, the EU BMR entered into force and the majority of provisions applied from January 2018.
−Removed: Under the EU BMR, benchmarks provided by a third-country (i.e.
−Removed: non-EU) benchmark administrator may be used by EU-supervised entities provided that the EC has adopted an equivalence decision or the administrator has been recognized or endorsed and the benchmarks are listed on the register established by ESMA.
−Removed: The EU BMR also provides for a transition period until December 31, 2021, allowing index providers to continue to provide critical benchmarks and for supervised entities to continue to utilize benchmarks provided by third-country
−Removed: administrators.
−Removed: There are proposals to further extend the transition period for the use of benchmarks provided by third-country administrators until at least December 31, 2023, subject to final approval by the European Parliament.
−Removed: From April 27, 2018 to December 31, 2020, IBA was authorized as a benchmark administrator under the EU BMR.
−Removed: As of January 1, 2021, IBA is authorized as a benchmark administrator under the U.K.
−Removed: BMR and benchmarks provided by IBA may continue to be used by supervised entities in the EU under the EU BMR transitional provisions.
−Removed: From May 24, 2019 to December 31, 2020, ICE Data Indices was recognized by the FCA as a third-country benchmark administrator under the EU BMR.
−Removed: As of January 1, 2021, ICE Data Indices is recognized as a third-country benchmark administrator under the U.K.
−Removed: BMR and benchmarks provided by ICE Data Indices may continue to be used by supervised entities in the EU under the EU BMR transitional provisions.
−Removed: In October 2020, the U.K.
−Removed: Government introduced the Financial Services Bill, which includes proposed amendments to the U.K.
−Removed: BMR to provide the FCA with authority to manage and direct any wind-down period prior to a cessation of the London Interbank Offered Rate, or LIBOR, including powers to direct a methodology change for a critical benchmark and extend its publication on a basis that is no longer representative of its original underlying market or economic reality.
−Removed: Legislation increasing the powers of regulators to change the methodology or underlying market represented by a benchmark, or extend the publication of a benchmark, including LIBOR, could result in increased risks to administrators, such as IBA, and users of such benchmarks.
−Removed: In November 2020, the European Parliament and Council reached an agreement on amending the EU BMR to provide the EC the power to designate a replacement benchmark that covers all references to a widely used reference rate that is phased out, including LIBOR, when necessary, to avoid disruption of the financial markets in the EU.
−Removed: • Market Data Requirements.
−Removed: and EU derivatives exchanges could be impacted by changes to requirements related to the dissemination of market data.
−Removed: In its December 2019 report to the EC, ESMA recommended against, among other things, outright regulation of market data prices, however ESMA suggested that users could gain transparency into how market data prices are set with the help of new supervisory guidance and targeted changes to the MiFID II/Markets in Financial Instruments Regulation, or MiFIR, text.
−Removed: The EC is considering ESMA’s report and is considering further legislative action in this area.
−Removed: Additionally, the FCA launched the "Accessing and using wholesale data Call for Input,” which will explore the changing use and value of data in wholesale financial markets.
−Removed: As required by a May 2020 SEC Order, in August 2020, the exchanges and FINRA submitted to the SEC a proposed new, single NMS Plan to replace the three existing NMS Plans that govern the dissemination of real-time, consolidated equity market data for exchange-listed cash equity securities.
−Removed: This proposed new single NMS Plan would not replace the current NMS Plans until it is approved by the SEC and a transition period concludes.
−Removed: Approval of the new NMS Plan by the SEC may affect NYSE's revenues from the sale of consolidated market data since all the market data fees for consolidated market data would be required to be re-filed with the SEC and would not be effective until approved.
−Removed: Separately, in June 2020, NYSE, Nasdaq and Cboe filed petitions for review with the U.S.
−Removed: Court of Appeals for the District of Columbia of the SEC order requiring the exchanges and FINRA to file this new NMS Plan.
−Removed: In December 2020, the SEC finalized a rule that would significantly change the content of consolidated data and the manner in which it is collected, consolidated and disseminated.
−Removed: There is a lengthy phase in of these rules of more than two years.
−Removed: The final rule replaces the current exclusive processor for collecting, consolidating, and disseminating cash equity market data with competing, multiple processors.
−Removed: NYSE currently operates the exclusive processor for securities listed on the NYSE exchanges and Cboe and will no longer receive revenue for this activity once the final rule is fully implemented.
−Removed: In addition, the final rule adds new depth of book and auction content to the information that is consolidated.
−Removed: It is uncertain the fees that exchanges will be permitted to charge competing consolidators and others for market data that is included within the new definition of consolidated market data and there could be an impact on NYSE’s revenues from the sale of market data.
−Removed: • Regulation of Services Offered by Non-Exchange Affiliates :
−Removed: In an October 2020 order approving certain wireless services filed by the NYSE exchanges, the SEC expressed an expanded interpretation of what constitutes an “exchange,” or a “facility” of an exchange, under the U.S.
−Removed: securities laws.
−Removed: To the extent that services offered by non-exchange affiliates of the NYSE exchanges are considered by the SEC to be subject to regulations applicable to registered securities exchanges, such services and the fees for such services would have to be filed with the SEC, which could impact the types of services we may offer and the revenues we receive from such services.
−Removed: We have filed a petition for review of this order with the U.S.
−Removed: Circuit Court of Appeals for the District of Columbia.
+Added: The FCA is using its legal powers under the U.K.
+Added: BMR to require the London Interbank Offered Rate, or LIBOR's, administrator, IBA, to publish certain Sterling and Japanese Yen LIBOR settings under a changed "synthetic" methodology until the end of 2022.
+Added: Any settings published under a “synthetic” methodology may no longer be representative of the underlying market or economic reality the setting is intended to measure as those terms are used in the U.K.
+Added: The FCA confirmed that it expects that certain U.S.
+Added: Dollar LIBOR settings will continue to be published on a representative basis until the end of June 2023.
+Added: The FCA will continue to consider requiring IBA to publish certain U.S.
+Added: Dollar LIBOR settings beyond June 30, 2023 under a changed “synthetic” methodology.
+Added: Usage of the synthetic LIBOR and U.S.
+Added: Dollar LIBOR settings may be restricted or prohibited in certain circumstances under applicable law.
+Added: The European Commission is using its powers under the EU Benchmarks Regulation, or EU BMR, to designate replacement benchmarks for certain Swiss franc LIBOR settings and the Euro Overnight Index Average, or EONIA, which cover all references to the relevant benchmark.
+Added: The European Commission has also announced that it plans to designate replacement benchmarks for certain Sterling and Japanese Yen LIBOR settings.
+Added: The transition period for the use of benchmarks provided by third-country administrators has been extended until at least December 31, 2023.
+Added: In April 2021, New York State enacted a law designed to reduce uncertainty and economic impacts of the permanent cessation of LIBOR for specified contracts, securities and other agreements that are economically linked to LIBOR that are governed by New York state law.
+Added: The New York law generally tracks the legislation proposed by the Alternative Reference Rates Committee and received broad industry support.
Listing and Trading Prohibitions on Certain Foreign Companies.
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For each company required to file periodic reports with the SEC, this Act requires the SEC to identify any company that retains a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board, or PCAOB, is unable to inspect or investigate because of a position taken in such foreign jurisdiction.
−Removed: If the SEC determines that the PCAOB has been
−Removed: unable to inspect or investigate such accounting firm for three consecutive years, it is required to prohibit such company from trading its securities on a U.S.
−Removed: securities exchange or in any “over-the-counter” market.
−Removed: As a consequence, the NYSE exchanges may be required to suspend trading in certain of their listed companies.
−Removed: In addition, on November 12, 2020, the former President of the United States issued an Executive Order that prohibits, subject to certain exceptions, transactions by U.S.
−Removed: persons in the securities of certain Chinese companies identified as having ties to the People's Liberation Army, and in securities that are derivatives of, or any securities that are designated to provide investment exposure to, such Chinese companies.
−Removed: To comply with the Executive Order and guidance from the U.S.
−Removed: Department of the Treasury, the NYSE suspended trading in three of its listed companies and commenced delisting proceedings.
−Removed: In the future, there may be other listed companies that the NYSE will be required to take similar action to comply with the Executive Order.
+Added: On December 16, 2021, the PCAOB designated China and Hong Kong as the jurisdictions where the PCAOB is not allowed to conduct full and complete audit inspections.
+Added: Pursuant to the PCAOB's determinations, the SEC will identify issuers that have used non-inspected audit firms.
+Added: If the SEC determines that an identified company has used a non-inspected audit firm for three consecutive years, it is required to prohibit such company's securities from trading on a U.S.
+Added: securities exchange or in any “over-the-counter” market in the U.S.
+Added: As a consequence, the NYSE is likely to be required to suspend trading in certain of its listed companies.
+Added: On June 3, 2021, President Biden signed an Executive Order, or the June Order, that prohibits U.S.
+Added: persons from purchasing or selling the publicly traded securities of companies determined to be Chinese Military Industrial Complex Companies, or CMICs, because they (i) operate in defense and related material sector, or the surveillance technology sector, of China, or (ii) own or control, or are owned or controlled by, an individual or entity that operates in such sectors.
+Added: Although there are no companies currently listed on the NYSE securities exchanges determined to be CMICs, in the future, there may be listed companies covered by the prohibitions.
See the discussion below and Item 1(A) “- Risk Factors” in this Annual Report for additional description of regulatory and legislative risks and uncertainties.
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Our principal executive offices are located at 5660 New Northside Drive, 3rd Floor, Atlanta, Georgia 30328.
−Removed: Our main telephone number is 1-770-857-4700, and our website is www.theice.com.
+Added: Our main telephone number is 1-770-857-4700, and our website is www.ice.com.
We are required to file reports and other information with the SEC.
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• Owning and operating cash equity and options exchanges exposes us to additional risks, including the regulatory responsibilities to which these businesses are subject.
−Removed: • Our business is subject to the impact of financial markets volatility, including the prices and interest rates underlying our derivative products or which impact mortgage origination volumes, due to conditions that are beyond our control.
−Removed: • Systems failures in the derivatives and securities trading industry could negatively impact us.
+Added: • Our business is subject to the impact of interest rate levels, inflation and financial markets volatility, which may be caused by conditions that are beyond our control.
+Added: • Systems failures in the derivatives and securities trading industry and mortgage technology industry could negatively impact us.
• We may be at greater risk from terrorism, including cyberterrorism, than other companies.
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• We may not be successful in offering new products or technologies or in identifying opportunities.
+Added: • Climate change and the transition to renewable energy and a net zero economy pose operational, commercial and regulatory risks.
• The COVID-19 pandemic could adversely affect our business, results of operations and financial condition.
• We may be required to recognize impairments of our goodwill, other intangible assets or investments.
+Added: • We may not realize the expected benefits of our majority investment in Bakkt and the investment may introduce additional risks to our business due to its evolving business model.
Legal and Regulatory
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• We are a holding company and depend on our subsidiaries for dividends, distributions and other payments.
−Removed: • We may fail to complete or realize the anticipated cost savings, growth opportunities and synergies and other benefits anticipated from our acquisitions, which could adversely affect the value of our common stock.
+Added: • We may fail to complete or realize the anticipated cost savings, growth opportunities and synergies and other benefits anticipated from our acquisitions or anticipated growth opportunities or expected benefits of our strategic investments, which could adversely affect the value of our common stock.
• Provisions of our organizational documents and Delaware law may delay or deter a change of control of ICE.
−Removed: Investment in and Operation of Bakkt
−Removed: • We may not realize the expected benefits of our majority investment in Bakkt and the investment may introduce additional risks to our business due to its evolving business model.
−Removed: • The characteristics of digital assets have been, and may in the future continue to be, exploited to facilitate illegal activity such as fraud, money laundering, tax evasion and ransomware scams, which could adversely affect us.
−Removed: • Bakkt is subject to anti-money laundering, counter terrorist financing laws and regulations and anti-corruption laws globally, and there can be no assurance that its employees or agents will not violate such laws and regulations.
−Removed: • Regulatory changes or actions may restrict the use of digital assets in a manner that adversely affects Bakkt’s business, prospects or operations and, consequently, our majority ownership interest in Bakkt.
−Removed: • Digital asset custodial solutions and related technology, including Bakkt’s systems and custodial arrangements, are subject to risks related to a loss of funds due to theft of digital assets, employee or vendor sabotage, security and cybersecurity risks, system failures and other operational issues and a lack of sufficient insurance which could cause damage to Bakkt’s reputation and brand.
−Removed: • Cyberattacks and security vulnerabilities could result in serious harm to Bakkt’s reputation, business, and financial condition.
BUSINESS AND INDUSTRY
Global economic, political and financial market events or conditions may negatively impact our business.
−Removed: Adverse macroeconomic conditions, including recessions, inflation, high unemployment, government shutdowns, currency fluctuations, interest rate changes, geopolitical events, climate change, international trade disputes, including the imposition of tariffs or other protectionist measures, actual or anticipated large-scale defaults or failures or slowdown of global trade have in the past negatively impacted consumer and corporate confidence and resulted in reductions in consumer, government and corporate spending, and could have such effects in the future, and in turn impact our business.
−Removed: If our customers reduce spending, workforce, trading activity or demand for financial data as a result of challenges in the prevailing economic markets, our revenues could decline.
+Added: Adverse macroeconomic conditions, including recessions, inflation, supply chain issues, labor shortages, government shutdowns, currency fluctuations, interest rate changes, increased mortgage foreclosure volume, geopolitical events or conflicts, international trade disputes, including the imposition of tariffs or other protectionist measures, actual or anticipated large-scale defaults or failures or slowdown of global trade have in the past negatively impacted consumer and corporate confidence and resulted in reductions in consumer, government and corporate spending, and could have such effects in the future, and in turn impact our business.
+Added: If our customers reduce spending, workforce, mortgage origination activity, trading activity or demand for financial data as a result of challenges in the prevailing economic markets, our revenues could decline.
A substantial portion of our revenues are derived from data services fees and fees for transactions executed and cleared in our markets.
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• a prolonged decrease in volatility in the financial markets;
−Removed: • heightened capital requirements or mandated reductions in leverage resulting from new regulations;
+Added: • heightened capital and margin requirements or mandated reductions in leverage resulting from new regulations;
• defaults by clearing or exchange members or the inability of participants to pay out contractual obligations;
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A stagnation or a decline in the initial public offering, or IPO, market, or issuers choosing to list on venues other than the NYSE, could have an adverse effect on our revenues.
−Removed: U.S.-China trade and diplomatic tensions, U.S.
−Removed: government policies toward China, including sanctions laws and regulations, and Chinese government policies toward U.S.
−Removed: companies may impact our existing business and future opportunities, as well as affect Chinese companies’ ability to do business with us.
−Removed: In addition, adverse conditions in the residential mortgage lending industry, including a substantial or prolonged decline in mortgage lending volume, may have an adverse effect on our revenues.
+Added: trade and diplomatic tensions, U.S.
+Added: government policies toward China, including sanctions laws, executive orders and other regulations, and Chinese government policies toward U.S.
+Added: companies and Chinese companies listed on U.S.
+Added: exchanges are likely to impact our existing business and future opportunities.
+Added: For example, in response to a 2020 executive order by President Trump and the June Order by President Biden in 2021, the NYSE delisted four Chinese telecommunications companies identified in those executive orders.
+Added: In addition, the Holding Foreign Companies Accountable Act, enacted in December 2020, requires the SEC to suspend trading in the U.S.
+Added: of any company whose accounting firm the PCAOB is unable to inspect or investigate for three consecutive years.
+Added: The NYSE anticipates that the SEC could suspend trading in a number of NYSE-listed companies under this Act.
+Added: In the future, there may be other listed companies that the NYSE will be required to take similar action against to comply with U.S.
+Added: government policies, which could impact our business.
+Added: In addition, adverse conditions in the residential mortgage lending industry, including a substantial or prolonged decline in mortgage lending volume or an increase in mortgage foreclosure volume, may increase our costs or have an adverse effect on our revenues.
Mortgage lending volume has decreased substantially in certain years in the past, and could again decrease in the future.
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We have an obligation to return margin payments and guaranty fund contributions to clearing members to the extent that the relevant member’s risk based on its open contracts to the clearing house is reduced.
−Removed: If a number of clearing members substantially reduce their open interest or default, the concentration of risks within our clearing houses will be spread among a smaller pool of clearing members, which would make it more difficult to absorb and manage risk in the event of a further clearing member’s default.
+Added: If a number of clearing members substantially reduce their open interest or default, the concentration of risks within our clearing houses will be spread
+Added: among a smaller pool of clearing members, which would make it more difficult to absorb and manage risk in the event of a further clearing member’s default.
Although our clearing houses have policies and procedures to help ensure that clearing members can satisfy their obligations, such policies and procedures may not succeed in preventing losses after a member's or counterparty’s default.
In addition, although we believe that we have carefully analyzed the process for setting margins and our financial safeguards, it is a complex process and there is no guarantee that our procedures will adequately protect us from the risks related to clearing these products.
−Removed: We cannot assure you these measures and safeguards will be sufficient to protect us
−Removed: from a default or that we will not be materially and adversely affected in the event of a significant default.
+Added: We cannot assure you these measures and safeguards will be sufficient to protect us from a default or that we will not be materially and adversely affected in the event of a significant default.
We have contributed our own capital to the front of the guaranty fund of the clearing houses that could be used in the event of a default.
−Removed: Furthermore, in 2019, we added a layer of insurance to our clearing member default protection.
−Removed: The default insurance layer resides after and in addition to the ICE Clear Credit, ICE Clear Europe, and ICE Clear U.S.
+Added: We also have default insurance that resides after and in addition to the ICE Clear Credit, ICE Clear Europe, and ICE Clear U.S.
‘Skin In The Game’ contributions and before the guaranty fund contributions of the non-defaulting clearing members.
−Removed: The default insurance has a three-year term, subject to renewal.
Notwithstanding these actions, the default of any one of the clearing members could subject our business to substantial losses and cause our customers to lose confidence in the guaranty of our clearing houses.
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Treasury securities, $1.5 billion of French Treasury securities, $1.4 billion of German Treasury securities, $2.2 billion of U.K.
−Removed: Treasury securities and $9.4 billion of other European, Japanese and Tri-Party Treasury securities.
+Added: Treasury securities and $15.4 billion of other European, Japanese, Canadian and Tri-Party Treasury securities.
Sovereign treasury securities have historically been viewed as one of the safest and most liquid securities for clearing houses to hold due to the perceived credit worthiness of major governments.
−Removed: However, the markets for such securities have experienced significant volatility during the past decade due to on-going financial challenges in some of the major European countries and the U.S.
−Removed: government’s negotiations regarding taxation, spending cuts and raising the debt ceiling, which is the maximum amount of debt that the U.S.
−Removed: government can legally incur.
−Removed: In addition, if there is a collapse in a specific currency relied upon by our clearing houses, our clearing houses would face significant expenses in changing their systems and such an event could cause a credit contraction and major swings in asset prices and exchange rates.
+Added: If there is a collapse in a specific currency relied upon by our clearing houses, our clearing houses will face significant expenses in changing their systems and such an event could cause a credit contraction and major swings in asset prices and exchange rates.
To mitigate this risk, our clearing houses currently apply a discount or “haircut” to the market values for all sovereign securities held as margin or guaranty fund contributions;
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Our cash equity and options exchanges also have certain regulatory responsibilities that must be fulfilled.
−Removed: For example, these exchanges are responsible for enforcing listed company compliance with applicable listing standards, enforcing our members' compliance with exchange rules and federal securities laws, complying with terms of NMS Plans, filing of all material changes to exchanges' rules with the SEC, and operating our exchanges consistent with exchange rules, federal securities laws, and other applicable laws.
−Removed: Any failure by one of our exchanges to comply with, and enforce compliance by their members with, exchange rules and securities laws could significantly harm our reputation, prompt regulatory scrutiny,
−Removed: result in the payment of fines or penalties and adversely affect our business, financial condition and operating results.
−Removed: Our ability to do this could be impaired by, for example, recent SEC amendments to NMS Plans for the consolidation of market data that impede the ability of the exchanges and FINRA to discharge their legal obligations by restricting the flow of information and constraining the decision-making authority of the exchanges and FINRA.
+Added: For example, these exchanges are responsible for enforcing listed company compliance with applicable listing standards, enforcing our members' compliance with exchange rules and federal securities laws, complying with terms of NMS Plans, filing of all
+Added: material changes to exchanges' rules with the SEC, and operating our exchanges consistent with exchange rules, federal securities laws, and other applicable laws.
+Added: Any failure by one of our exchanges to comply with, and enforce compliance by their members with, exchange rules and securities laws could significantly harm our reputation, prompt regulatory scrutiny, result in the payment of fines or penalties and adversely affect our business, financial condition and operating results.
+Added: Our ability to do this could be impaired by, for example, SEC amendments to NMS Plans for the consolidation of market data that impede the ability of the exchanges and FINRA to discharge their legal obligations by restricting the flow of information and constraining the decision-making authority of the exchanges and FINRA.
We must allocate significant resources to fulfill our regulatory and self-regulatory responsibilities.
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listing and trading prohibitions on certain foreign companies.
−Removed: Our business is subject to the impact of financial markets volatility, including the prices and interest rates underlying our derivative products, or which impact mortgage origination volumes, due to conditions that are beyond our control.
+Added: Our business is subject to the impact of interest rate levels, inflation and financial markets volatility, which may be caused by conditions that are beyond our control.
Trading volume in our markets and products is largely driven by the degree of volatility - the magnitude and frequency of fluctuations - in prices and levels of the underlying commodities, securities, indices, financial benchmarks or other instruments.
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Were there to be a sustained period of stability in the prices or levels of the underlying commodities, securities, indices, benchmarks or other instruments of our products, we could experience lower trading volumes, slower growth or declines in revenues.
−Removed: Factors that are particularly likely to affect price and interest rate levels and volatility, and thus trading volumes, include:
+Added: In addition, interest rates are a significant factor influencing mortgage loan production volumes.
+Added: Rising interest rates are likely to reduce mortgage loan production volumes, which could potentially impact our transaction-based revenues.
+Added: In the event that inflation increases significantly and persistently, this would likely increase the cost of capital, resulting in a slowdown of the growth of early stage companies, causing companies to stay private longer.
+Added: Credit health of market participants may also be impacted, increasing the risk of default or companies inability to comply with listing standards.
+Added: An inflationary environment may also reduce consumer optimism resulting in lower demand for mortgage loans.
+Added: Factors that are particularly likely to affect price and interest rate levels and volatility, and thus trading and mortgage loan production volumes, include:
• global economic, political and market conditions;
• concerns over inflation, deflation, legislative and regulatory changes, government fiscal and monetary policy - including actions by the Federal Reserve and other foreign monetary units' governing bodies, and investor and consumer confidence levels.
+Added: Factors that are particularly likely to affect trading volumes include:
• weather conditions including hurricanes and other significant events, natural and unnatural disasters like large oil spills that impact the production of commodities and, in the case of energy commodities, production, refining and distribution facilities for oil and natural gas;
• war, acts of terrorism and any unforeseen market closures or disruptions in trading;
−Removed: • political developments impacting international trade, including continued uncertainty surrounding the implementation of Brexit, trade disputes and increased tariffs, particularly between the U.S.
+Added: • political developments impacting international trade, including trade disputes and increased tariffs, particularly between the U.S.
and China, and imposition of protectionist measures;
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• credit quality of market participants, the availability of capital and the levels of assets under management.
−Removed: Any one or more of these factors, which are beyond our control, may reduce trading activity, which could make our markets less attractive as a source of liquidity, and in turn could further discourage existing and potential market participants and thus accelerate a decline in the level of trading activity and potentially related services such as data or clearing.
+Added: Any one or more of these factors, which are beyond our control, may reduce volumes and trading activity.
Further, lower market volatility could also result in more exchanges competing for trading volumes to maintain their growth.
If any of these unfavorable conditions were to persist over a lengthy period of time and trading volumes were to decline substantially and for a long enough period, the critical mass of transaction volume necessary to support viable markets could be jeopardized.
−Removed: Because our cost structure is largely fixed, if demand for our current products and services
−Removed: decline for any reason, we may not be able to adjust our cost structure to counteract the associated decline in revenues, which would cause our net income to decline.
−Removed: Systems failures in the derivatives and securities trading industry could negatively impact us.
−Removed: High-profile system failures in the derivatives and securities trading industry have in the past, and could in the future, negatively impact our business and result in a loss of confidence in our technology and our markets, regulatory investigations, fines and penalties and business activity slowdown or interruptions.
+Added: Because our cost structure is largely fixed, if demand for our current products and services declines for any reason, we may not be able to adjust our cost structure to counteract the associated decline in revenues, which would cause our net income to decline.
+Added: Systems failures in the derivatives and securities trading industry and mortgage technology industry could negatively impact us.
+Added: High-profile system failures in the derivatives and securities trading industry and mortgage technology industry have in the past, and could in the future, negatively impact our business and result in a loss of confidence in our technology and our markets, regulatory investigations, fines and penalties and business activity slowdown or interruptions.
Further, regulators have imposed requirements for trading platforms that have been costly for us to implement and could result in a decrease in demand for some of our services.
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Given our prominence in the global securities industry and the location of many of our properties and personnel in U.S.
−Removed: and European financial centers, including lower Manhattan, we may be more likely than other companies to be a direct target of, or an indirect casualty of, attacks by terrorists or terrorist organizations, or other extremist organizations that employ threatening or harassing means to achieve their social or political objectives.
+Added: and European financial centers, including lower Manhattan, and our presence in India, Abu Dhabi and Israel, we may be more likely than other companies to be a direct target of, or an indirect casualty of, attacks by terrorists or terrorist organizations, or other extremist organizations that employ threatening or harassing means to achieve their social or political objectives.
It is impossible to predict the likelihood or impact of any terrorist attack on the securities industry generally, or on our business.
5 unchanged sentences
Fluctuations in foreign currency exchange rates could adversely affect our financial results.
−Removed: Since we conduct operations in several different countries, including the U.S., U.K.
−Removed: and Canada, as well as the EU, substantial portions of our revenues, expenses, assets and liabilities are denominated in U.S.
−Removed: dollars, pounds sterling, Canadian dollars and euros.
+Added: Since we conduct operations in a number of countries and regions, including the U.S., U.K., EU, Canada, Asia Pacific and the Middle East, substantial portions of our revenues, expenses, assets and liabilities are denominated in currencies other than the U.S.
Because our consolidated financial statements are presented in U.S.
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dollar against the other currencies could affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies.
−Removed: External events such as Brexit and the negotiations regarding the terms thereof and the passage of U.S.
−Removed: taxation reform legislation have caused, and may continue to cause, significant volatility in currency exchange rates, especially among the U.S.
+Added: External events such as Brexit have caused, and may in the future cause, significant volatility in currency exchange rates, especially among the U.S.
dollar, the British pound sterling and the euro.
If global economic and market conditions, or economic conditions in the U.K., EU, the U.S.
−Removed: or other key markets remain uncertain or deteriorate further, the value of the pound sterling and euro and the global credit markets may further weaken.
−Removed: General financial instability in countries in the EU could have a contagion effect on the region and contribute to the general instability and uncertainty in the EU.
−Removed: Events that adversely affect our U.K.
−Removed: and EU clients and suppliers could in turn have a materially adverse effect on our international business results and our operating results.
+Added: or other key markets deteriorate, the value of the pound sterling, euro or U.S.
+Added: dollar may weaken.
+Added: Further, financial instability in a particular country could have a contagion effect on the region in which it is located and contribute to general instability and uncertainty in that region.
+Added: Events that adversely affect our
+Added: clients and suppliers in a region could in turn have a materially adverse effect on our international business results and our operating results.
For additional information on our foreign currency exchange rate risk, refer to “- Foreign Currency Exchange Rate Risk” in Item 7A “- Quantitative and Qualitative Disclosures About Market Risk", which is included in this Annual Report.
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Our growth is highly dependent on customer demand for our core products and services, favorable economic conditions and our ability to invest in our personnel, facilities, infrastructure and financial and management systems and controls.
−Removed: Adverse economic conditions
−Removed: could reduce customer demand for our products and services, which may place a significant strain on our management and resources and could force us to defer existing or future planned opportunities.
+Added: Adverse economic conditions could reduce customer demand for our products and services, which may place a significant strain on our management and resources and could force us to defer existing or future planned opportunities.
We regularly evaluate our existing operations, service capacity and business efficiencies and, as a result of such evaluations, we may undertake strategic initiatives outside of and within our businesses.
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We from time to time launch, and intend in the future to launch, new products, services and business ventures and continue to explore and pursue other opportunities to strengthen our business and grow our company.
−Removed: We have spent and may continue to spend substantial time and money developing new product or service offerings or improving current product or service offerings, including, for example, our mortgage technology services.
+Added: We have spent and may continue to spend substantial time and money developing new product or service offerings or improving current product or service offerings.
If these offerings are not successful, we may miss a potential market opportunity and not be able to recover the costs of such initiatives.
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Further, we have entered into and may seek in the future to enter into or increase our presence in markets that already possess established competitors who may enjoy the protection of high barriers to entry, among other advantages.
−Removed: Introducing or maintaining our offerings in certain countries is also subject to a number of other risks, including currency exchange rate risk, difficulties enforcing agreements or collecting receivables, longer payment cycles, compliance with the laws or regulations of these countries, and political and regulatory uncertainties.
In addition, in light of consolidation in the exchange, data services, clearing and mortgage technology sectors and competition for opportunities, we may be unable to identify strategic opportunities or we may be unable to negotiate or finance any future acquisition successfully.
1 unchanged sentence
Also, offering new products and services and pursuing acquisitions requires substantial time and attention of our management team, which could prevent them from successfully overseeing other initiatives that are necessary for our success.
+Added: Climate change and the transition to renewable energy and a net zero economy pose operational, commercial and regulatory risks.
+Added: Climate change may increase the frequency or severity of extreme weather events, and if we are not adequately resilient to deal with acute climate events, our operations, either in a particular location or globally, may be impacted.
+Added: Extreme weather events could also impact the activities of our customers or third-party vendors or suppliers.
+Added: The physical commodities and assets underlying certain of our markets may also be impacted by climate change.
+Added: In addition, the transition to renewable energy and a net zero economy involves changes to consumer and institutional preferences around energy consumption, and the possible failure of our products or services to facilitate the needs of customers during the transition to renewable energy could adversely impact our business and revenues.
+Added: Changing preferences could also have an adverse impact on the operations or financial condition of our customers, which could result in reduced revenues from those customers.
+Added: We are also subject to risks relating to new or heightened climate change-related regulations or legislation, which could impact us and our customers and result in increased regulatory, compliance or operational costs.
+Added: We are also subject to reputational risks relating to the perception of whether or not we are facilitating a migration away from fossil fuels.
+Added: For example, our reputation could be damaged as a result of our offering certain products or services associated with causing or exacerbating climate change, or by any decision by us to continue to conduct or change our activities in response to considerations relating to climate change.
+Added: The risks associated with climate change and the transition to renewable energy and a net zero economy are continuing to evolve rapidly, and we expect that climate change-related risks may increase over time.
The COVID-19 pandemic could adversely affect our business, results of operations and financial condition.
The coronavirus (COVID-19) pandemic has created economic and financial disruptions globally and has led governmental authorities to take unprecedented measures to mitigate the spread of the disease, including travel bans, border closings, business closures, quarantines and shelter-in-place orders, and to take actions designed to stabilize markets and promote economic growth.
−Removed: From an operational perspective, the spread of COVID-19 has resulted in, and could continue to result in, temporary closures of our office facilities and the office facilities of our customers and our third-party vendors.
−Removed: We have taken preventive measures and implemented contingency plans, and currently most of our employees are working remotely.
+Added: From an operational perspective, the spread of COVID-19 has resulted in, and could again result in, temporary closures of our office facilities and the office facilities of our customers and our third-party vendors.
+Added: We have taken preventive measures and implemented contingency plans, and currently many of our employees are working remotely.
However, we cannot assure you that such measures will adequately protect our business, and an extended period of remote work arrangements could heighten existing and introduce new operational risks, including, but not limited to, cybersecurity risk, and could strain our technological resources and business continuity plans.
1 unchanged sentence
Further, although we maintain contingency plans for events such as pandemic outbreaks, the further spread of COVID-19 could impact the availability of our executive officers and other key employees who are necessary to conduct our business.
−Removed: The extent of the impact of the COVID-19 pandemic on our business, financial condition and results of operations will depend largely on future developments, including, among other things, the widespread distribution, acceptance and effectiveness of a vaccine, which are highly uncertain and cannot be predicted at this time.
−Removed: Delays in the widespread distribution of a vaccine, or lack of public acceptance of a vaccine, could have an adverse effect on the global economy.
−Removed: Further, even if a vaccine is widely distributed and accepted, there can be no assurance that the vaccine will ultimately be successful in limiting or stopping the spread of COVID-19.
−Removed: A prolonged economic downturn could have an adverse effect on our revenues related to certain activities such as a decline in demand for certain data products and a decline in IPOs.
−Removed: The COVID-19 pandemic could also have an adverse impact on our customers’ businesses, risk management needs and ability to trade, and the resulting impact on our business will depend on future developments, which are highly uncertain and cannot be predicted.
−Removed: While governmental organizations are engaging in efforts to combat the spread and severity of COVID-19, these measures may not be effective.
+Added: The emergence of new COVID-19 variant strains that are resistant to vaccines or a decrease in the effectiveness of vaccines over the long term could impact, among other things, the availability of our staff and primary facilities, and the viability of our customers.
+Added: While governmental organizations continue to engage in efforts to combat the spread and severity of COVID-19, these measures may not be effective.
Moreover, actions taken by U.S.
−Removed: or other governmental authorities that are intended to
−Removed: ameliorate the macroeconomic or other effects of COVID-19, or delays in the announcement or implementation of regulatory measures that had been pending prior to the COVID-19 pandemic, have resulted in and may in the future result in regulatory uncertainty and could in turn impact our business.
−Removed: At this time, we cannot predict how legal and regulatory responses to concerns about COVID-19 will impact our business.
+Added: or other governmental authorities that were intended to ameliorate the macroeconomic or other effects of COVID-19, or delays in the announcement or implementation of regulatory measures that had been pending prior to the COVID-19 pandemic resulted in and may in the future result in regulatory uncertainty and could in turn impact our business.
+Added: In addition, the spread of COVID-19 variants, along with other factors, such as restrictions and limitations on business activities, labor shortages at ports and for long-haul transportation, rising fuel costs and raw material shortages, have resulted in disruptions to global supply chains, which has impacted the availability of critical hardware and extended lead times for certain components and systems we require for our operations.
+Added: The COVID-19 pandemic could continue to negatively affect the flow or availability of certain hardware and related products for technology that we need to operate our business effectively and efficiently.
+Added: Our inability to acquire suitable hardware and related products on acceptable terms or the loss of key suppliers could negatively affect our business.
+Added: Pandemic-related restrictions could also impact third-party providers' abilities to meet their contractual obligations to us, potentially impacting our operations.
+Added: The extent of the impact of the COVID-19 pandemic on our business, financial condition and results of operations will depend on future developments, including, among other things, the effectiveness of vaccines over the long term and against emerging variant strains.
+Added: A prolonged economic downturn could have an adverse effect on our revenues related to certain activities such as a decline in demand for certain data products and a decline in IPOs.
+Added: The COVID-19 pandemic could also have an adverse impact on our customers’ businesses, risk management needs and ability to trade.
In addition, to the extent that COVID-19 may adversely affect our business, financial condition or results of operations, it may also heighten other risks described in this section.
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For additional information on our goodwill, other intangible assets and investments, refer to Notes 3, 4 and 8 to our consolidated financial statements and “- Critical Accounting Policies - Goodwill and Other Identifiable Intangible Assets” in Item 7 “- Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included in this Annual Report.
+Added: We may not realize the expected benefits of our majority investment in Bakkt and the investment may introduce additional risks to our business due to its evolving business model.
+Added: We have a majority ownership interest in Bakkt, which operates as a separate publicly-traded company listed on the NYSE.
+Added: Due to our majority ownership interest in Bakkt, we have increased financial and reputational risks if there is a security or system failure, a failure to launch one or more products, or if Bakkt's business is unsuccessful.
+Added: It may take longer than expected for us to realize the expected returns from this investment or such returns may ultimately be less than anticipated.
+Added: Furthermore, our investment in Bakkt entails numerous risks, including risks relating to Bakkt’s ability to:
+Added: • manage the complexity of its business model to stay current with the industry;
+Added: • successfully enter categories and markets in which it may have limited or no prior experience;
+Added: • apply distributed ledger technology to a global ecosystem for digital assets;
+Added: • successfully develop and integrate products, systems or personnel into its business operations;
+Added: • obtain and maintain required licenses and regulatory approvals for its business;
+Added: • maintain a risk management and compliance framework designed to detect illegal activity such as fraud, money laundering, tax evasion and ransomware scams and comply with anti-money laundering, counter-terrorist financing laws and regulations and anti-corruption laws globally;
+Added: • comply with existing or new laws, regulations or orders of any governmental authority related to the use of digital assets;
+Added: • maintain technology systems and processes that prevent cyberattacks and security vulnerabilities.
+Added: As digital assets and blockchain technologies evolve, Bakkt may add, modify or discontinue certain aspects of its business model relating to the product mix and service offerings.
+Added: Future additions and modifications to Bakkt’s business will increase the complexity of its business and place significant strain on Bakkt’s management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions.
+Added: We cannot offer any assurance that these or any other additions or modifications will be successful or will not result in harm to Bakkt’s business.
LEGAL AND REGULATORY
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In many cases, our activities may be subject to overlapping and divergent regulation in different jurisdictions.
−Removed: There is also the risk that new laws or regulations or changes in enforcement practices applicable to our businesses or those of our clients could be imposed.
−Removed: This could adversely affect our ability to compete effectively with other institutions that are not affected in the same way or impact our clients’ overall trading volume through our exchanges and demand for our market data, mortgage technology and other services.
+Added: The adoption of new laws or regulations or changes in enforcement practices applicable to our businesses or those of our clients could adversely affect our ability to compete effectively with other institutions that are not affected in the same way or impact our clients’ overall trading volume through our exchanges and demand for our market data and connectivity offerings, mortgage technology and other services.
We are also subject to regulatory risks relating to the mortgage industry, which is heavily regulated in the U.S.
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Alternatively, reduced regulatory requirements could also reduce the demand for certain of our products and services, which are intended to enable our customers to satisfy existing regulatory requirements.
−Removed: In addition, potential structural changes in the U.S.
−Removed: residential mortgage industry, in particular, plans to diminish the role of Fannie Mae and Freddie Mac, could disrupt the residential mortgage market and have a material adverse effect on our business.
−Removed: There is also increasing public concern regarding data privacy and data protection and many jurisdictions have passed laws in this area, such as the European Union General Data Protection Regulation, the U.K.
−Removed: General Data Protection Regulation, and the California Consumer Privacy Act, and other jurisdictions are considering imposing additional restrictions.
−Removed: The laws and regulations related to privacy and data protection are increasing in complexity and number,
−Removed: change frequently and increasingly conflict among the various countries in which we operate, which has resulted in greater compliance risk and cost for us.
+Added: Potential structural changes in the U.S.
+Added: residential mortgage industry, in particular, those involving the roles of Fannie Mae and Freddie Mac, could disrupt the residential mortgage
+Added: market and have a material adverse effect on our business.
+Added: Further, as a critical third-party service provider in the mortgage industry, we are subject to supervision and examination by certain regulators, which has resulted in, and will continue to result in, additional operating costs.
+Added: There is ongoing public concern regarding data privacy and data protection in many jurisdictions in which ICE operates.
+Added: Many of those jurisdictions have passed data privacy legislation, with many more contemplating new laws.
+Added: The laws and regulations related to privacy and data protection are increasing in complexity and number, change frequently and increasingly conflict among the various countries in which we operate, which has resulted in greater compliance risk and cost for us.
Regulation of privacy and data protection often times require monitoring of, and changes to, our data practices in regard to the collection, use, disclosure, storage, transfer and/or security of personal and sensitive information, including the personal information of the customers of the users of the software and services provided by our ICE Mortgage Technology business.
These developments could impact our profitability in the affected jurisdictions, or even make it uneconomical for us to continue to conduct all or certain of our businesses in such jurisdictions, or could cause us to incur significant costs associated with changing our business practices, restructuring our businesses or moving all or certain of our businesses and our employees to other jurisdictions, including liquidating assets or raising capital in a manner that adversely increases our funding costs or otherwise adversely affects our stockholders and creditors.
−Removed: and EU legal and regulatory developments, in particular EMIR, EMIR 2.2, MiFID II and the BMR, including each such regulation as incorporated into U.K.
+Added: and EU legal and regulatory developments, in particular EMIR, EMIR 2.2, U.K.
+Added: MiFID II and EU MiFID II, the U.K BMR and the EU BMR, including each such regulation as incorporated into U.K.
law, and the Dodd-Frank Act, have significantly altered and propose to further alter the regulatory framework within which we operate and may adversely affect our competitive position and profitability.
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The enacted and proposed legal and regulatory changes most likely to affect our businesses are:
−Removed: non-discriminatory access provisions of MiFID II, interoperability and margin rules in EMIR, enhanced regulatory capital liquidity and leverage rules in Basel III and Capital Requirements Directive IV, access rules under the BMR, the non-harmonization of margin requirements, implementation of a financial transaction tax, access to our benchmarks and maintaining our exchanges’ abilities to operate as SROs with related immunity for the discharge of their regulatory functions.
+Added: non-discriminatory access provisions of U.K.
+Added: MiFID II and EU MiFID II, interoperability and margin rules in EMIR, enhanced regulatory capital liquidity and leverage rules in Basel III and Capital Requirements Directive IV, access rules under the U.K.
+Added: BMR and EU BMR, the non-harmonization of margin requirements, implementation of a financial transaction tax, access to our benchmarks and maintaining our exchanges’ abilities to operate as SROs with related immunity for the discharge of their regulatory functions.
As the operator of global businesses, the lack of harmonization in international financial reform efforts could impact our business as our clearing houses and exchanges are subject to regulation in multiple jurisdictions.
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To date, however, funding has been provided solely by the SROs, partly in exchange for promissory notes, which increases the risk that SROs, including us, will not be reimbursed for costs expended to date.
−Removed: Due to delays and failures in implementation and functionality by the original plan processor, we recorded promissory note impairment charges of $2 million and $16 million in 2020 and 2019, respectively.
−Removed: We believe the risk that SROs are not reimbursed has increased, resulting in this impairment.
−Removed: Until the SEC approves a funding model that shares the cost of the CAT between the SROs and broker-dealers, the SROs may continue to incur additional costs, which may become significant and may not be reimbursed.
+Added: Due to the replacement of the original plan processor, we recorded promissory note impairment charges of $2 million and $16 million in 2020 and 2019, respectively.
+Added: Because the SEC has not approved a funding model that shares the cost of the CAT between SROs and broker-dealers, we believe there is a risk that SROs are not reimbursed, resulting in this impairment.
+Added: Until the SEC approves a funding model, the SROs will continue to incur additional costs, which may become significant and may not be reimbursed.
As of December 31, 2021, we have accrued approximately $51 million as a receivable in connection with our portion of expenses related to the CAT implementation.
+Added: There is an increased focus on, and scrutiny of, ESG data and ratings providers by regulators and policymakers.
+Added: Regulators and policymakers have indicated that extension of their regulatory oversight to ESG data service providers is possible.
+Added: This could result in new or additional regulations applicable to our ESG data products and services which could result in additional operating costs.
We are subject to tax laws, regulations, rulings and audits in multiple U.S.
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For example, there have been discussions in various jurisdictions around financial transaction or digital service tax frameworks.
−Removed: Changes to tax frameworks in jurisdictions where we operate significant business, for example in New Jersey, New York, the EU or federally in the U.S., has the potential to increase costs to us or to our market participants and discourage participation in the markets we operate.
−Removed: Furthermore, implementation of any new or amended tax laws or regulations could impact our global operations or trading volumes.
+Added: Changes to tax frameworks in jurisdictions where we operate significant business, for example in New Jersey, New York, the EU or
+Added: federally in the U.S., have the potential to increase costs to us or to our market participants and discourage participation in the markets we operate.
+Added: Furthermore, implementation of any new or amended tax laws or regulations could impact our global operations, trading volumes or financial results.
Other enacted and proposed legal and regulatory changes not discussed above may also adversely affect our competitive position and profitability.
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Our compliance and risk management methods, as well as our fulfillment of our regulatory obligations, might not be effective, which could lead to enforcement actions by our regulators.
−Removed: Our ability to comply with existing rules, regulations and laws and changing rules, regulations and laws largely depends on our establishment and maintenance of compliance, audit and reporting systems that can quickly adapt and respond, as well as our ability to attract and retain qualified compliance and other risk management personnel.
+Added: Our ability to comply with existing and future rules, regulations and laws largely depends on our establishment and maintenance of compliance, audit and reporting systems that can quickly adapt and respond, as well as our ability to attract and retain qualified compliance and other risk management personnel.
Regulators periodically review our ability to self-regulate and our compliance with a variety of laws and regulations including self-regulatory standards.
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Our acquisitions expose us to new regulatory requirements.
−Removed: For example, as a result of our acquisition of Interactive Data, we operate an SEC-registered investment adviser.
−Removed: Investment advisers are subject to significant regulatory obligations under the Investment Advisers Act.
−Removed: Prior to this acquisition, none of our businesses were registered under the Investment Advisers Act.
−Removed: Compliance with the Investment Advisers Act and other regulatory requirements gives rise to costs and expenses that may be material.
+Added: For example, as a result of our acquisition of Interactive Data in 2015, we operate an investment adviser registered with the SEC under the Investment Advisers Act.
In addition, our acquisition of the BondPoint ATS in January 2018 and our acquisition of TMC Bonds in July 2018 exposes us to increased exposure to regulatory scrutiny from the SEC, FINRA and MSRB.
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residential mortgage industry, including the FFIEC and its member agencies, including, among others, the CFPB.
+Added: Compliance with any such regulatory requirements gives rise to costs and expenses that may be material.
Our regulators have broad enforcement powers to censure, fine, issue cease-and-desist orders, embargo future business activity or prohibit us from engaging in some of our businesses.
−Removed: We have settled certain regulatory actions in the past, including ICE Data Pricing & Reference Data LLC’s settlement with the SEC in November 2020 in which we agreed to pay an $8 million civil monetary penalty.
We continue to face the risk of significant intervention by regulatory authorities, including extensive examination and surveillance activity of our business.
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equities and equity options exchanges, our ability to assess fees for market data products and certain connectivity fees are subject to review by the SEC.
−Removed: There continues to be opposing industry viewpoints and litigation as to the extent that our U.S.
+Added: There continue to be opposing industry viewpoints and litigation as to the extent that our U.S.
equities and equity options exchanges should be able to charge for market data and market access, and the manner in which we set such exchange fees could be reassessed.
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Separately, our European exchanges are currently authorized to sell trade information on a non-discriminatory basis at a reasonable cost.
−Removed: This regulatory position could be modified or interpreted by the EC or future European court decisions in a manner that could have an adverse effect on our European market data revenues.
+Added: This regulatory position could be modified or interpreted by the European Commission, or EC, or future European court decisions in a manner that could have an adverse effect on our European market data revenues.
In addition, the FCA and IOSCO have both issued consultations to explore access to market data in financial markets.
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and EU could lead to certain macroeconomic conditions that adversely affect our business.
−Removed: Adverse macroeconomic consequences such as deterioration in economic conditions, volatility in currency exchange rates, legal uncertainty, potentially divergent national laws and regulations as the U.K.
−Removed: determines which EU laws to replace or enactment of replicate and/or prohibitive laws and regulations that may adversely affect both demand for our products and services and our ability to deliver our products and services into the EU.
The long-term effects of Brexit will depend, in part, on the agreement the U.K.
made to retain access to EU markets.
−Removed: Following the formation of a majority Conservative government in December 2019, the U.K.
+Added: In December 2019, the U.K.
withdrew from the EU on January 31, 2020 and completed its withdrawal on January 1, 2021.
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The EC has, however, adopted an 18-month temporary equivalence decision for U.K.
−Removed: CCPs, which applies beginning on January 1, 2021.
+Added: CCPs, which began to apply as of January 1, 2021.
ICE Clear Europe has been recognized by ESMA as a third-country CCP in accordance with EMIR.
−Removed: As a result of the trade and cooperation agreement not providing free trade arrangements for financial services, any equivalence determinations or any further transition period for financial services, could include restrictions on access to our services by persons located in the EU or make access more expensive, which could adversely affect our operations and profitability or even make it uneconomical for us to continue to conduct all or certain of our businesses in such jurisdictions.
+Added: In November 2021, the EC announced that it will propose an extension of the equivalence decision applying to U.K.
+Added: CCPs in early 2022.
+Added: As a result of the U.K.
+Added: and EU trade and cooperation agreement not providing free trade arrangements for financial services, any equivalence determinations or any further transition period for financial services, could include restrictions on access to our services by persons located in the EU or make access more expensive, which could adversely affect our operations and profitability or even make it uneconomical for us to continue to conduct all or certain of our businesses in such jurisdictions.
The consequences of Brexit and the terms of the trade and cooperation agreement could also cause us to incur significant costs associated with changing our business practices, restructuring our businesses or moving certain of our businesses and our employees to other jurisdictions.
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Risks relating to the administration of benchmarks and indices, including LIBOR, and the potential for changes to, cessations of, and the replacement of, or transition from, benchmarks and indices, including LIBOR, may result in legal risks and could adversely affect our business.
−Removed: Certain of our subsidiaries produce and license multiple global benchmarks and indices across asset classes, which are referenced in certain of our trading and clearing products.
−Removed: To ensure continued trading and clearing in these benchmark-related products, and the continued licensing and use of these benchmarks and indices, our subsidiaries must be able to demonstrate that these benchmarks and indices are administered with integrity and are not readily subject to manipulation and must also continue to evolve these benchmarks and indices as necessary to maintain their reliability and relevance.
+Added: Certain of our subsidiaries produce and license multiple benchmarks and indices across asset classes, which are used globally and are referenced in certain of our trading and clearing products.
+Added: To ensure continued trading and clearing in these benchmark-related products, and the continued licensing and use of these benchmarks and indices, our subsidiaries must be able to demonstrate that these benchmarks and indices are determined with integrity and are not readily subject to manipulation, and must also continue to evolve these benchmarks and indices as necessary to maintain their reliability and relevance and continue to administer these benchmarks and indices in compliance with applicable laws and regulations.
As an example, our subsidiary, IBA, is the administrator of various global benchmarks, including LIBOR.
−Removed: IBA assumed the administration of LIBOR following various cases of attempted manipulation and misconduct related to the LIBOR benchmark that emerged following the financial crisis.
Any failures, negative publicity or lawsuits related to our subsidiaries' administration of benchmarks and indices, including LIBOR, could result in a loss of confidence in the administration of these benchmarks and indices and could harm our business and our reputation.
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In July 2017, the FCA stated its intention that it would no longer be necessary to sustain LIBOR through its influence or legal powers beyond 2021.
−Removed: The FCA and global regulators have since advocated for a transition from LIBOR to alternative rates by the end of 2021.
−Removed: On December 4, 2020, IBA published a consultation on its intention to cease the publication of (i) all GBP, EUR, CHF and JPY LIBOR settings, and the 1 Week and 2 Month USD LIBOR settings immediately following the LIBOR publication on December 31, 2021, and (ii) the Overnight and 1, 3, 6 and 12 Month USD LIBOR settings immediately following the LIBOR publication on June 30, 2023, subject to any rights of the FCA to compel IBA to continue publication.
−Removed: The consultation closed on January 25, 2021, and IBA intends to share the results of the consultation with the FCA and to publish a feedback statement summarizing responses from the consultation.
−Removed: In October 2020, the U.K.
−Removed: Government introduced the Financial Services Bill, which includes proposed U.K.
−Removed: legislation to ensure that the FCA has appropriate regulatory powers to manage and direct any wind-down period prior to eventual LIBOR cessation.
−Removed: The new proposed powers would allow the FCA to compel IBA to publish critical benchmarks (such as LIBOR) under a new methodology that is no longer representative of the underlying market that the benchmark currently measures, and also to restrict the use of critical benchmarks (such as LIBOR) subject to such changes or in respect of which the administrator has confirmed its intention to cease the benchmark.
−Removed: We continue to monitor industry and regulatory developments, but it is not yet possible to predict with certainty how the transition from, and any potential cessations of, LIBOR will proceed, and how the proposed new powers of the FCA will be implemented, and what effect the transition from, and any potential exercise of new FCA powers in relation to, LIBOR may have on the markets that use the benchmark today.
+Added: As a result, regulators in multiple jurisdictions have encouraged market participants to transition from using LIBOR to alternative reference rates.
+Added: The publication of most LIBOR settings ceased after December 31, 2021 and certain others are scheduled to cease after June 30, 2023.
+Added: The FCA is requiring IBA to publish certain LIBOR settings under a changed "synthetic" methodology during 2022.
+Added: Any settings published under a “synthetic” methodology will no longer be representative of the underlying market or economic reality the setting is intended to measure as those terms are used in the U.K.
+Added: Any failures, negative publicity or lawsuits related to our subsidiaries' administration of "synthetic" LIBOR, could result in a loss of confidence in the administration of these benchmarks and indices and could harm our business and our reputation.
+Added: Under the U.K.
+Added: BMR, the use of continuing LIBOR settings by U.K.-supervised entities in certain regulated contracts and instruments may be restricted or prohibited.
+Added: The use of continuing LIBOR settings in jurisdictions outside the U.K.
+Added: and by entities subject to the oversight of other regulatory authorities may also be restricted or prohibited by law in those jurisdictions and by the requirements of such regulatory authorities.
+Added: We continue to monitor industry and regulatory developments in relation to the LIBOR transition and cessation and the resulting impacts on our business and on the markets that use the benchmark today.
We may face liability for content contained in our data products and services.
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Such claims and lawsuits could have a material adverse effect on our business, financial condition and operating results and a negative impact on our reputation.
−Removed: In addition, we license and redistribute data and content from various third parties and the terms of these licenses change frequently.
+Added: In addition, we license and redistribute data and content from various third-party sources and the terms of these licenses change frequently.
Our third-party data and content suppliers may audit our use of and our clients’ use of and payment for data and content from time to time in the ordinary course of business, including audits currently underway.
Such third-party data and content suppliers have asserted and may in the future assert that we or our clients owe additional amounts under the terms of the applicable license agreements, that we inappropriately distributed the third-party data or that we or our clients used the data or content in a manner that exceeded the scope of the applicable license agreement or without a license agreement.
−Removed: See the discussion on the trademark infringement and breach of contract claims from CME Group, Inc., or CME, under the caption "SPAN Trademark Dispute" in Note 15 to our consolidated financial statements and related notes, which are included elsewhere in this Annual Report.
+Added: In some instances, where we have certain commercial relationships with third-parties, we have assumed the responsibility for this third-party source liability.
We have and expect to continue to spend and allocate resources to develop and acquire the use of technology and other intellectual property rights to manage these risks and track third-party data usage, but we cannot be assured that we will not incur liability.
−Removed: We may incur costs to investigate any allegations and may be required to pay damages to or make unexpected settlement payments to these data and content suppliers and these costs and payments could be material.
+Added: The costs and resources required to investigate any allegations could be material, and we may still be required to pay damages to or make unexpected large settlement payments to these data and content suppliers, which could also give rise to reputational harm.
We are subject to significant litigation and liability risks.
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A large number of significant error trades could result in participant dissatisfaction and a decline in participant willingness to trade in our electronic markets.
−Removed: In addition, we are subject to on-going legal disputes that could result in the payment of fines, penalties or damages and could expose us to additional liability in the future.
−Removed: See Item 3 "Legal Proceedings" in this Annual Report for a general description of our legal proceedings and claims and Note 15 to our consolidated financial statements and related notes, which are included elsewhere in this Annual Report, for a summary of specific legal proceedings under the captions "City of Providence Litigation," "LIBOR Litigation," "ICE Data Pricing & Reference Data Matter" and "SPAN Trademark Dispute".
−Removed: While ICE intends to vigorously defend these specific matters, the outcome of these legal proceedings cannot be determined and adverse rulings in these matters could impact our financial condition and continued operations.
+Added: In addition, we are subject to ongoing legal disputes that could result in the payment of fines, penalties or damages and could expose us to additional liability in the future.
+Added: See Item 3 "Legal Proceedings" in this Annual Report for a general description of our legal proceedings and claims and Note 15 to our consolidated financial statements and related notes, which are included elsewhere in this Annual Report, for a summary of specific legal proceedings.
+Added: The outcome of any of these legal proceedings that remain unresolved cannot be determined and adverse rulings in these matters could impact our financial condition and continued operations.
Further, we could incur significant expenses defending the claims mentioned above and any future claims, even those without merit, which could adversely affect our business, financial condition and operating results.
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The secure transmission of confidential information and the ability to reliably transact on our electronic platforms and provide financial data services are critical elements of our operations.
−Removed: Some of our products and services involve the storage and transmission of proprietary information and sensitive or confidential client and other data, including client portfolio information.
+Added: Some of our products and services involve the storage and transmission of proprietary information and sensitive or confidential client and other data, including client portfolio information or personally identifiable information.
If anyone gains improper access to our electronic platforms, networks or databases, they may be able to steal, publish, delete or modify our confidential information or that of a third party.
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Although we have not been subject to cyberattacks or other cyber incidents that have had a material impact on our operations or financial condition, we have from time to time experienced cybersecurity events including distributed denial of service, or DDoS, attacks, malware infections, phishing, web attacks and other information technology incidents that are typical for a financial services company of our size.
−Removed: For example, we experienced DDoS attempts, brand misuse, social media impersonation, and phishing attempts directed toward employee systems and personal email accounts during 2020.
+Added: For example, we experienced DDoS attempts, brand misuse, and phishing attempts directed toward employee systems and personal email accounts during 2021.
While we operate an Information Security program that is designed to prevent, detect, track and mitigate cyber incidents and that has detected and mitigated such incidents in the past, we cannot assure you that these measures will be sufficient to protect our business against future attacks.
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Additionally, as threats continue to evolve and increase, and as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, we may be required to devote significant additional resources to modify and enhance our security controls and to identify and remediate any security vulnerabilities, which could adversely impact our net income.
−Removed: Following the acquisition of Ellie Mae, whose systems process and host millions of U.S.
−Removed: residential mortgages each year resulting in a larger attack surface, our exposure to personally identifiable information, or PII has increased.
−Removed: Failure to maintain the security of the confidential information of the customers of the users of our software and services could damage our reputation and brand and substantially harm our business and operating results.
Further, cybersecurity threats to, and incidents involving, vendors and other third parties who support our activities - particularly those with less-sophisticated defenses - could impact us.
−Removed: For example, although we did not experience any material impacts from the SolarWinds Orion cybersecurity breach that was widely publicized in December 2020, we cannot assure you that we will not experience future events that may be material.
+Added: For example, although we did not experience any material impacts from the Log4j security vulnerability that was widely publicized in December 2021, we cannot assure you that we will not experience future events that may be material.
Our business may be harmed by computer and communication systems failures and delays.
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If these companies were to experience difficulties, discontinue providing services to us for any reason or be unable to or fail to provide the type of service agreed to for any reason, we would likely experience significant disruption to our business and may be subject to litigation by our clients, increased regulatory scrutiny or regulatory fines or damage to our reputation.
−Removed: It could require a significant amount of time to
−Removed: transition to new third-party service providers.
+Added: It could require a significant amount of time and additional resources to transition to new third-party service providers or to enter into new commercial arrangements in order to offset loss of services to our clients.
Our third-party data suppliers perform audits on us from time to time in the ordinary course of business to determine if data we license for redistribution has been properly accounted for in accordance with the terms of the applicable license agreement.
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In the future, litigation or regulatory action may limit the right of owners to grant exclusive licenses for index futures and contracts trading to a single exchange, and our competitors may succeed in providing economically similar products in a manner or jurisdiction not otherwise covered by our exclusive license.
−Removed: MiFID II introduced a harmonized approach to the licensing of services relating to commodity derivatives across Europe and the legislation requires open access to any benchmarks (a benchmark is an index or other measure used to determine the value of a financial instrument, for example, LIBOR or the S&P 500) used in Europe.
+Added: MiFID II introduced a harmonized approach to the licensing of services relating to commodity derivatives across Europe and the legislation requires open access to any benchmarks used in Europe.
If unlicensed trading of any index product where we hold an exclusive license were permitted, we could lose trading volume for these products which would adversely affect our revenues associated with the license and the related index products.
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Our ability to attract and retain key personnel, in particular senior management, will be dependent on a number of factors, including prevailing market conditions and compensation packages offered by companies competing for the same talent.
+Added: Current economic, market, social, and political conditions and the recent re-opening of the global economy have increased talent risk, which has led to higher employee attrition and made recruitment for certain positions more difficult, and could lead to a loss of top performers and make it more difficult to fill key positions.
+Added: For example, our in-office requirements, as well as the location of our offices, and our remote working arrangements may not meet the needs or expectations of our employees, including senior management or other key employees, or may not be viewed as competitive, which could negatively impact our ability to attract and retain highly skilled employees.
+Added: In addition, we operate globally and geopolitical events or conflicts in the countries or regions in which we operate could lead to physical risks to our personnel and disruption to business continuity that could negatively impact our ability to execute our business strategy.
There is no guarantee that we will have the continued service of key employees who we rely upon to execute our business strategy and identify and pursue strategic opportunities and initiatives.
The loss of the services of any of our senior management or other key personnel, or our inability to attract highly qualified senior management and other key personnel, could harm our business.
−Removed: In particular, we may have to incur costs to replace senior officers or other key employees who leave, and our ability to execute our business strategy could be impaired if we are unable to replace such persons in a timely manner.
+Added: In particular, we have to incur costs to replace senior officers or other key employees who leave, and our ability to execute our business strategy could be impaired if we are unable to replace such persons in a timely manner or at all.
Effective succession planning is also important to our long-term success.
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In particular, our inability to sustain reduced debt on a consolidated basis may result in a downgrade of our credit ratings.
−Removed: Following our acquisition of Ellie Mae, and our associated borrowings, Moody's Investor Services and Standard & Poor's re-evaluated our credit ratings and lowered our ratings along with Standard & Poor's placing us on "negative outlook".
−Removed: Although these actions have not resulted in a material impact on our business or a material increase in borrowing costs, a significant downgrade of our credit ratings in the future could impact customers’ willingness to use our clearing houses, make parties less willing to do business with us, and could negatively impact our ability to access the capital markets and increase the cost of our commercial paper and any future debt funding we may obtain.
+Added: A significant downgrade of our credit ratings in the future could impact customers’ willingness to use our clearing houses, make parties less willing to do business with us, and could negatively impact our ability to access the capital markets and increase the cost of our commercial paper and any future debt funding we may obtain.
We face intense competition;
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We currently compete with:
−Removed: • regulated, diversified futures exchanges globally that offer trading in a variety of asset classes similar to those offered by us, such as energy, agriculture, equity and equity index, credit, and interest rate derivatives markets and foreign exchange;
+Added: • regulated, diversified futures exchanges that offer trading in a variety of asset classes similar to those offered by us, such as energy, agriculture, equity and equity index, credit, and interest rate derivatives markets and foreign exchange;
• exchanges offering listing and trading of cash equities, ETFs, closed-end funds and other structured products similar to those offered by us;
2 unchanged sentences
• interdealer brokers active in the global credit derivatives markets;
−Removed: • existing and newly formed electronic trading platforms, service providers and other exchanges;
+Added: • existing and newly formed electronic trading platforms, service providers and exchanges, some of which do not receive the same regulatory scrutiny as established market places;
• other clearing houses;
15 unchanged sentences
To remain competitive, we must continue to enhance and improve the responsiveness, functionality, accessibility and reliability of our electronic platforms and our proprietary and acquired technology.
−Removed: The financial services industry is characterized by rapid technological change, change in use patterns, change in client preferences, frequent product and service introductions and the emergence of new industry standards and practices.
−Removed: These changes could render our
−Removed: existing proprietary technology uncompetitive or obsolete.
−Removed: We have implemented a new trading technology system at NYSE and if there are trading disruptions or if the new system has inadequate performance, we could suffer material losses, incur reputational damage or be subject to heightened regulatory scrutiny.
+Added: The financial services industry is characterized by rapid technological change, change in use patterns, change in client preferences, frequent product and service introductions, the emergence of new industry standards and practices and increased consolidation through
+Added: mergers and acquisitions activity that results in new competitors or expanded product offerings by current competitors.
+Added: These changes could render our existing proprietary technology uncompetitive or obsolete.
We cannot assure you that we will successfully implement new technologies or adapt our proprietary technology to our clients’ requirements or emerging industry standards in a timely and cost-effective manner.
18 unchanged sentences
Our failure to adequately protect our proprietary technology and intellectual property could harm our reputation and affect our ability to compete effectively.
−Removed: Further, we may need to resort to litigation to enforce our intellectual property rights, which may require significant financial and managerial resources.
−Removed: As a result, we may choose not to enforce our infringed intellectual property rights, depending on our strategic evaluation and judgment regarding the best use of our resources, the relative strength of our intellectual property portfolio and the recourse available to us.
−Removed: In addition, our competitors, as well as other companies and individuals, may have obtained, and may be expected to obtain in the future, patent and intellectual property rights related to the types of products and services we offer or plan to offer.
+Added: Further, we have resorted to litigation to enforce our intellectual property rights in the past, and may need to in the future, which requires significant financial and managerial resources.
+Added: As a result, we have chosen not to enforce our infringed intellectual property rights in the past, and may choose not to in the future, depending on our strategic evaluation and judgment regarding the best use of our resources, the relative strength of our intellectual property portfolio and the recourse available to us.
+Added: In addition, our competitors, as well as other companies and individuals, have obtained, and may obtain in the future, patent and intellectual property rights related to the types of products and services we offer or plan to offer.
We cannot assure you that we are or will be aware of all patents and intellectual property rights that may pose a risk of infringement by our products and services.
−Removed: As a result, we may face allegations that we have infringed the intellectual property rights of third parties which may be costly for us to defend against.
+Added: As a result, we have in the past faced and may in the future face allegations that we have infringed the intellectual property rights of third parties which may be costly for us to defend against.
If one or more of our products or services is found to infringe patents and intellectual property rights held by others, we may be subject to lawsuits or required to stop developing or marketing the products or services, obtain licenses to develop and market the products or services from the owners of the intellectual property or redesign the products or services in such a way as to avoid infringing the third-party intellectual property.
−Removed: We also could be required to pay damages if we were found to infringe intellectual property rights held by others, which could materially adversely affect our business, financial condition and operating results.
+Added: We also have in the past, and could in the future, be required to pay damages if we are found to infringe intellectual property rights held by others, which could materially adversely affect our business, financial condition and operating results.
We cannot assess the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others, whether such licenses would be available or, if available, whether we would be able to obtain such licenses on commercially reasonable terms.
If we were unable to obtain such licenses, we may not be able to redesign our products or services at a reasonable cost to avoid infringement, which could materially adversely affect our business, financial condition and operating results.
−Removed: See the discussion on the trademark infringement and breach of contract claims
−Removed: from CME in Note 15 to our consolidated financial statements and related notes, which are included elsewhere in this Annual Report.
We are a holding company and depend on our subsidiaries for dividends, distributions and other payments.
3 unchanged sentences
If our subsidiaries are unable to make dividend payments to us and sufficient cash or liquidity is not otherwise available, we may not be able to make dividend payments to our stockholders, principal and interest payments on our outstanding debt or repurchase shares of our common stock, which could have a material adverse effect on our business, financial condition and operating results.
−Removed: We may fail to complete or realize the anticipated cost savings, growth opportunities and synergies and other benefits anticipated from our acquisitions, which could adversely affect the value of our common stock.
−Removed: We have completed many acquisitions, including our recent acquisition of Ellie Mae, and plan to continue to pursue acquisitions and joint ventures.
+Added: We may fail to complete or realize the anticipated cost savings, growth opportunities and synergies and other benefits anticipated from our acquisitions or anticipated growth opportunities or expected benefits of our strategic investments, which could adversely affect the value of our common stock.
+Added: We have completed many acquisitions and plan to continue to pursue acquisitions and joint ventures.
The success of our acquisitions will depend, in part, on our ability to integrate these businesses and realize anticipated cost savings, revenue synergies and growth opportunities.
3 unchanged sentences
In addition, a variety of factors, including but not limited to regulatory conditions, governmental competition approvals, cultural differences and difficulty integrating technology platforms, may adversely affect our ability to complete our acquisitions or realize our anticipated cost savings and synergies.
−Removed: We may also not realize anticipated growth opportunities and other benefits from strategic investments or strategic joint ventures or alliances that we have entered into or may enter into for a number of reasons, including regulatory or government approvals or changes, global market changes, contractual obligations, competing products and, in some instances, our lack of or limited control over the management of the business.
+Added: We may also not realize anticipated growth opportunities and other benefits from strategic investments or strategic joint ventures or alliances that we have entered into or may enter into for a number of reasons, including decline in value of the other company, regulatory or government approvals or changes, global market changes, contractual obligations, competing products and, in some instances, our lack of or limited control over the management of the business.
+Added: For example, we have a majority ownership interest in Bakkt but do not control the management of the business.
+Added: A substantial decline in Bakkt's financial performance or stock price, significant failure to or any major technology failures or cyber attacks could lead to litigation against us and reputational harm that could negatively impact our business and the value of our stock.
Further, strategic initiatives that have historically been successful may not continue to be successful due to competitive threats, changing market conditions or the inability for the parties to extend the relationship into the future.
10 unchanged sentences
effect, such as provisions limiting the ability of certain interested stockholders, as defined under Delaware law, from causing the merger or acquisition of a corporation against the wishes of the Board of Directors.
−Removed: INVESTMENT IN AND OPERATION OF BAKKT
−Removed: We may not realize the expected benefits of our majority investment in Bakkt and the investment may introduce additional risks to our business due to its evolving business model.
−Removed: We have a majority ownership interest in Bakkt.
−Removed: Bakkt intends to launch an integrated platform that enables users and partners to buy, sell, store, convert and spend digital assets, which include cryptocurrencies and other assets, such as digital cash, gift cards, loyalty and rewards points, and in-game assets.
−Removed: Bakkt also operates a custodial solution for Bitcoin futures traded on ICE Futures U.S.
−Removed: and other related trading products based on those futures.
−Removed: Due to our majority ownership interest in Bakkt, we have increased financial and reputational risks if there is a failure to launch one or more products, or if the launch of a new product is unsuccessful.
−Removed: Also, there can be no assurance that Bakkt will receive the necessary regulatory approvals or support from partners and users to launch products as planned, that Bakkt will operate as anticipated, or that we will realize the expected return on our investment.
−Removed: We regularly evaluate our existing operations, service capacity and business efficiencies and, as a result of such evaluations, we may undertake strategic initiatives outside of and within our businesses.
−Removed: As a result, it may take longer than expected for us to realize the expected returns from this investment or such returns may ultimately be less than anticipated.
−Removed: Furthermore, our investment in Bakkt entails numerous risks, including risks relating to Bakkt’s ability to:
−Removed: • manage the complexity of its business model to stay current with the industry;
−Removed: • successfully enter categories and markets in which it may have limited or no prior experience;
−Removed: • apply distributed ledger technology to a global ecosystem for digital assets;
−Removed: • successfully develop and integrate products, systems or personnel into its business operations;
−Removed: • obtain and maintain required licenses and regulatory approvals for its business.
−Removed: As digital assets and blockchain technologies evolve, Bakkt may add, modify or discontinue certain aspects of its business model relating to the product mix and service offerings.
−Removed: Future additions and modifications to Bakkt’s business will increase the complexity of its business and place significant strain on Bakkt’s management, personnel, operations, systems, technical performance, financial resources and internal financial control and reporting functions.
−Removed: We cannot offer any assurance that these or any other additions or modifications will be successful or will not result in harm to Bakkt’s business.
−Removed: Distributed ledger technology is relatively new, and we believe that the application of distributed ledger technology to a global ecosystem for digital assets is novel.
−Removed: Bakkt has limited experience applying distributed ledger technology to a global ecosystem for digital assets.
−Removed: The creation and operation of such technology in this application is subject to potential technical, legal and regulatory constraints.
−Removed: Any problems that Bakkt encounters with the operation of the Bakkt systems, including technical, legal and regulatory problems, could have a material adverse effect on its business and plan of operations.
−Removed: Hiring qualified and experienced personnel in this specialized technology space is difficult due to the high level of competition and scarcity of experience.
−Removed: Bakkt may have difficulty finding, hiring and integrating qualified employees.
−Removed: Bakkt's future revenue will be heavily dependent on transaction fees from payments, trading, and conversion, and the spread from the buying and selling of Bitcoin by users.
−Removed: Failure to grow the volume of payments, trading and conversion, or any subsequent products released by Bakkt, would negatively impact Bakkt's business, financial condition and operating results and, consequently, our majority ownership interest in Bakkt.
−Removed: As described above, on January 11, 2021, Bakkt entered into the Merger Agreement with VIH.
−Removed: The proposed transaction is subject to customary closing conditions, including the approval of VIH’s shareholders and certain regulatory approvals.
−Removed: At the Closing, ICE will enter into a voting agreement with the combined company and ICE expects to reclassify the combined company as an equity method investment of ICE and Bakkt will therefore cease to be consolidated with ICE’s financial statements.
−Removed: The proposed transaction is currently pending, and there is no assurance that all closing conditions will be satisfied or waived.
−Removed: In the event the proposed transaction is not consummated, the expected benefits of the proposed transaction, including the contribution of additional capital to Bakkt, will not be realized, and Bakkt would not be de-consolidated from ICE’s financial statements as described above.
−Removed: The characteristics of digital assets have been, and may in the future continue to be, exploited to facilitate illegal activity such as fraud, money laundering, tax evasion and ransomware scams, which could adversely affect us.
−Removed: Digital assets and the digital asset industry are relatively new and, in many cases, lightly regulated or largely unregulated.
−Removed: Some types of digital assets, particularly cryptocurrencies, have characteristics, such as the speed with which transactions can be conducted, the ability to conduct transactions without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, the irreversible nature of certain transactions and encryption technology that anonymizes these transactions, that make those assets particularly susceptible to use in illegal activity such as fraud, money laundering, tax evasion and ransomware scams.
−Removed: While we believe that Bakkt’s risk management and compliance framework is reasonably designed to detect any such illicit activities, we cannot ensure that Bakkt will be able to detect any such illegal activity in all instances.
−Removed: Because the speed, irreversibility and anonymity of certain digital asset transactions make them more difficult to track, fraudulent transactions may be more likely to occur.
−Removed: Bakkt may be specifically targeted by individuals seeking to conduct fraudulent transfers, and it may be difficult or impossible for Bakkt to detect and avoid such transactions in certain circumstances.
−Removed: Bakkt is subject to anti-money laundering, counter terrorist financing laws and regulations and anti-corruption laws globally, and there can be no assurance that its employees or agents will not violate such laws and regulations .
−Removed: Bakkt is subject to anti-money laundering and counter terrorist financing laws and regulations globally, including the USA PATRIOT Act, as well as economic and trade sanctions programs, including those imposed and administered by the U.S.
−Removed: Department of the Treasury’s Office of Foreign Assets Control, or OFAC.
−Removed: Under OFAC’s economic sanctions program, Bakkt is prohibited from financial transactions and other dealings with certain countries and geographies and with persons and entities included in OFAC's sanctions lists, including its list of Specially Designated Nationals and Blocked Persons.
−Removed: Bakkt has implemented policies and procedures designed to help ensure compliance with these laws and regulations, but there can be no assurance that its employees or agents will not violate such laws and regulations.
−Removed: A failure by Bakkt or its employees or agents to comply with such laws and regulations and subsequent judgment or settlement against Bakkt under these laws could subject Bakkt to monetary penalties, damages, and/or have a significant reputational impact.
−Removed: Bakkt is also subject to anti-corruption laws and regulations globally, including the U.S.
−Removed: Foreign Corrupt Practices Act and the U.K.
−Removed: Bakkt has implemented policies and procedures designed to help ensure compliance with these laws and regulations, but there can be no assurance that its employees or agents will not violate such laws and regulations.
−Removed: A failure by Bakkt or its employees or agents to comply with such laws and regulations and subsequent judgment or settlement against Bakkt under these laws could subject Bakkt to monetary penalties, damages, and/or have a significant reputational impact.
−Removed: Regulatory changes or actions may restrict the use of digital assets in a manner that adversely affects Bakkt’s business, prospects or operations and, consequently, our majority ownership interest in Bakkt.
−Removed: As digital assets, including cryptocurrencies, have grown in both popularity and market size, governments have reacted differently to such digital assets, with certain governments deeming them illegal and others allowing their use and trade.
−Removed: Ongoing and future regulatory actions may impact the ability of Bakkt to continue to operate, and such actions could affect the ability of Bakkt to continue as a going concern, which would have a material adverse effect on the business, prospects or operations of Bakkt and, consequently, our majority ownership interest in Bakkt.
−Removed: The CFTC has designated bitcoin as a commodity, and as such, exchange-traded derivatives involving bitcoin are subject to the CFTC's jurisdiction and enforcement powers.
−Removed: Although the CFTC has suggested it is not particularly focused on pursuing such enforcement at this time, in the event that the CFTC does pursue such enforcement and ultimately shuts down an exchange on which Bakkt’s Bitcoin futures contract is traded, it may have a significant adverse impact on Bakkt's business and plan of operations and, consequently, our majority ownership interest in Bakkt.
−Removed: The regulatory framework is unsettled with respect to many forms of digital assets, which means that federal or state regulators may in the future curtail or prohibit the acquisition, use or redemption of certain digital assets.
−Removed: Ownership of, holding or trading in certain digital assets may be subject to sanction.
−Removed: Federal or state regulators may also take regulatory action that may increase the cost and/or subject companies to additional regulation that custody or facilitate the trading of digital assets.
−Removed: In addition, as Bakkt expands its business to new products and services, it will come under the jurisdiction of additional regulators - both with respect to jurisdiction (inside and outside the U.S.) and subject matter (payments, consumer protection, and other areas).
−Removed: Any failure or perceived failure to comply with existing or new laws, regulations, or orders of
−Removed: any governmental authority (including changes to or expansion of the interpretation of those laws, regulations, or orders), including those discussed in this risk factor, may subject Bakkt to significant fines, penalties, criminal and civil lawsuits, forfeiture of significant assets, and enforcement, result in additional compliance and licensure requirements, increase regulatory scrutiny of its business, restrict Bakkt’s operations, and force Bakkt to change its business practices, make product or operational changes, or delay planned product launches or improvements.
−Removed: Bakkt has implemented policies and procedures designed to help ensure compliance with applicable laws and regulations, but there can be no assurance that its employees, contractors, or agents will not violate such laws and regulations.
−Removed: Digital asset custodial solutions and related technology, including Bakkt’s systems and custodial arrangements, are subject to risks related to a loss of funds due to theft of digital assets, employee or vendor sabotage, security and cybersecurity risks, system failures and other operational issues and a lack of sufficient insurance which could cause damage to Bakkt's reputation and brand.
−Removed: Bakkt's systems and custodial solutions involve the processing, storage and transmission of digital assets, including cryptocurrencies, and data.
−Removed: While Bakkt will contractually limit the amount of exposure it will have in the event that digital assets are stolen or misappropriated, we cannot guarantee that these limits will protect Bakkt from additional liability and other damage.
−Removed: The theft or misappropriation of digital assets held in custody by Bakkt would likely result in financial loss, reputational damage, potential lack of trust from our customers in other business lines, negative press coverage and diversion of Bakkt management’s time and focus.
−Removed: The secure storage and transmission of digital assets and data over networks will be a critical element of Bakkt’s operations.
−Removed: Despite the defensive measures Bakkt may take, these threats may come from external factors such as governments, organized crime, hackers and other third parties such as outsourced or infrastructure-support providers and application developers, or may originate internally from an employee or service provider to whom Bakkt has granted access to its systems.
−Removed: Digital asset transactions may be irrevocable, and stolen or incorrectly transferred digital assets may be irretrievable.
−Removed: Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer of a digital asset generally will not be reversible, and Bakkt may not be capable of seeking compensation for any such transfer or theft.
−Removed: It is possible that, through computer or human error, or through theft or criminal action, the digital asset could be transferred in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts.
−Removed: Such events would have a material adverse effect on the ability of Bakkt to continue as a going concern, which would have a material adverse effect on our majority ownership interest in Bakkt.
−Removed: While Bakkt maintains insurance policies, those policies may not be adequate to reimburse Bakkt for losses caused by security breaches, and Bakkt may lose digital assets valued in excess of the insurance policy without any recourse.
−Removed: Unlike bank accounts or accounts at some other financial institutions, in the event of loss or loss of utility value, there is no public insurer, such as the Securities Investor Protection Corporation or the FDIC, to offer recourse to Bakkt or to any investor and the misappropriated digital assets may not easily be traced to the bad actor.
−Removed: Further, when cryptocurrency custodial solutions or transfer venues (whether involving Bakkt systems or others) experience system failures or other operational issues, such events could result in a reduction in cryptocurrency prices or confidence and impact the success of Bakkt and have a material adverse effect on the ability of Bakkt to continue as a going concern.
−Removed: Cyberattacks and security vulnerabilities could result in serious harm to Bakkt’s reputation, business, and financial condition.
−Removed: Bakkt's business involves the collection, storage, processing, and transmission of confidential information and users' personal data, including financial information and information about how users interact with Bakkt’s platform.
−Removed: Bakkt has built its reputation on the premise that Bakkt offers its partners and users a secure and convenient way to manage their digital assets.
−Removed: An increasing number of organizations, including large merchants, businesses, technology companies, and financial institutions, as well as government institutions, have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks, including on their websites, mobile applications, and infrastructure.
−Removed: The techniques used to obtain unauthorized, improper, or illegal access to systems and information (including users' personal data), disable or degrade service, or sabotage systems are constantly evolving and have become increasingly complex and sophisticated, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target.
−Removed: Unauthorized parties have attempted, and Bakkt expects that they will continue to attempt, to gain access to Bakkt’s systems or facilities through various means, including, but not limited to, hacking into Bakkt’s systems or facilities or those of its users, partners, or vendors, and attempting to fraudulently induce users of Bakkt's systems (including employees and users) into disclosing user names, passwords, payment card information, or
−Removed: other sensitive information, which may in turn be used to access Bakkt’s information technology systems.
−Removed: Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insider threats.
−Removed: Certain efforts may be supported by significant financial and technological resources, making them even more sophisticated and difficult to detect.
−Removed: Numerous and evolving cybersecurity threats, including advanced and persisting cyberattacks, cyberextortion, spear phishing and social engineering schemes, the introduction of computer viruses or other malware, and the physical destruction of all or portions of Bakkt’s information technology and infrastructure could compromise the confidentiality, availability, and integrity of the data in Bakkt's systems.
−Removed: Although Bakkt has developed systems and processes designed to protect data it manages, prevent data loss and other security breaches, and effectively respond to known and potential risks, and Bakkt expects to continue to expend significant resources to bolster these protections, there can be no assurance that these security measures will provide absolute security or prevent breaches or attacks.
−Removed: Bakkt’s information technology and infrastructure may be vulnerable to cyberattacks or security breaches, and third parties may be able to access Bakkt's users' personal or proprietary information, banking, digital asset and payment card data or other sensitive data that are stored on or accessible through those systems.
−Removed: Bakkt has experienced from time to time, and may experience in the future, breaches of its security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities, or other irregularities.
−Removed: Actual or perceived breaches of Bakkt's security could, among other things:
−Removed: • interrupt Bakkt’s operations;
−Removed: • result in Bakkt’s systems or services being unavailable;
−Removed: • result in improper disclosure of data and violations of applicable privacy and other laws;
−Removed: • materially harm Bakkt’s reputation and brand;
−Removed: • result in significant regulatory scrutiny, investigations, fines, penalties and other legal and financial exposure;
−Removed: • cause Bakkt to incur significant remediation costs;
−Removed: • lead to loss of user confidence in, or decreased use of, Bakkt’s products and services;
−Removed: • divert the attention of management from the operation of Bakkt’s business;
−Removed: • result in significant compensation or contractual penalties from Bakkt to Bakkt’s customers and their business partners as a result of losses to them or claims by them;
−Removed: • adversely affect Bakkt’s business and results of operations.
−Removed: In addition, any cyberattacks or data security breaches affecting the information technology or infrastructure of companies Bakkt acquires or of Bakkt’s users, partners, or vendors (including data center and cloud computing providers) could have similar negative effects.
−Removed: Actual or perceived vulnerabilities or data breaches may lead to claims against Bakkt.
−Removed: In addition, under payment card rules and its contracts with its card processors, if there is a breach of payment card information that Bakkt stores, or that is stored by its direct payment card processing vendors, Bakkt could be liable to the payment card issuing banks and other third parties or subject to fines and higher transaction fees.
−Removed: Bakkt expects to expend significant additional resources to protect against security or privacy breaches and may be required to redress problems caused by breaches.
−Removed: Financial services regulators in various jurisdictions, including the U.S.
−Removed: and the EU, have implemented authentication requirements for banks and payment processors intended to reduce online fraud, which could impose significant costs, require Bakkt to change its business practices, make it more difficult for new users to join Bakkt, and reduce the ease of use of Bakkt's products, which could harm Bakkt's business.
−Removed: While Bakkt maintains insurance policies, they may not be adequate to reimburse Bakkt for losses caused by security breaches.
UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.