A Culture of Compliance Our values define our culture and how we operate. The Board oversees, counsels and directs management in the long-term interests of the Company and our stockholders.
Intelligence Community and Department of Defense. Noonan currently serves on the Board of Directors of Manhattan Associates since Ann Cairns joined our Board in March Currently, she serves as president, International Markets for Mastercard, responsible for the management of all markets and customer-related activities outside North America; a role she has held since August Cairns has held several global management positions where she led operations in Europe, U.
At the start of her career, she spent time as an award-winning research engineer, culminating as the head of Offshore Engineer-Planning for British Gas and was the first woman qualified to go offshore in Britain. Cairns served as a Director of AstraZeneca from to April Duriya Farooqui joined the Board in March This unique public-private partnership focuses on priorities for the City in collaboration with the Mayor of Atlanta. Her executive consulting spanned across customer analytics, pricing, divestitures, transformations and strategy.
Farooqui holds an M. Sharon Bowen joined the Board in December Bowen brings more than 35 years of regulatory, securities, and public policy expertise. Most recently, she served as a Commissioner of the U. Bowen was previously confirmed by the U. She assumed the role of Acting Chair in March Bowen earned a B. We believe that each of our current Board members has unique experiences and skill sets that give Intercontinental Exchange stockholders a well-rounded leadership team.
Taken together, the backgrounds and skill sets of our Board positions them for effective oversight and strategic counsel to management. We believe the diversity and strong mix of skill sets on our Board strengthens our company and adds to stockholder value. Currently, our Board has 12 members, four of whom are female. In recent years, we have actively recruited additional candidates who are women, minorities or cyber security experts. Those efforts resulted in the additional Board members listed above.
Additionally, we have been aggressive in adding to the female representation on our 17 subsidiary boards, which now comprise 30 percent women. Intercontinental Exchange focuses on ensuring strong relationships with all stakeholders — from customers and stockholders, to regulators and those in the communities where we live and work. We believe in open and transparent communication, and we value the feedback we get from these groups.
We regularly engage with both our stockholders and prospects about our business operations through quarterly earnings reports, investor meetings and conferences. In , we expanded on our governance activities by conducting a governance road show.
We were pleased to share the progress we made on board diversity and board member refreshment. We received input on a range of topics, including executive compensation programs, board refreshment and evaluation, board diversity, cyber security and risk management, human capital management and sustainability. We appreciate all of the feedback and will continue to take it into account as we further develop our work in these areas.
We will continue to provide updates on our progress through our quarterly reports, proxy, annual report and annual corporate responsibility reports. We look forward to continued dialogue and interactions with our investors and industry counterparts on ESG topics.
Intercontinental Exchange provides a well-balanced andperformance-based executive compensation program. We believe that this philosophy aligns company, officer,employee and stockholder interests, and providesincentives to meet or exceed business objectives. We continue toemphasize variable incentive compensation, rather thanfixed, which is consistent with our philosophy.
We have a rigorous goal-setting process that is directly tied to compensation plans and is overseen by our Board of Directors. Annual cash bonus and performance-based stock awards are based on ambitious financial targets set for the company. In addition to the performance-based compensation program, our Board is focused on compensation practices that are well recognized as part of strong governance standards.
Compensation recoupment policies i. As a global company with locations spread around the world, we must be prepared to respond to a wide range of issues and maintain seamless, secure operations.
Thousands of companies rely on us to help them raise capital, manage risk and access data. Our risk management programs are designed to provide for the security and safety of our operations, safeguard our people and our facilities and mitigate any business disruption. We take seriously the trust our customers have in our technology and the responsibility to protect their data.
With the assistance of our Audit and Risk Committees and our Subsidiary Boards, the Board oversees that our assets are properly safeguarded, that appropriate financial and other controls are maintained, and that our business is conducted prudently and in compliance with applicable laws, regulations and our corporate governance guidelines. We have adopted a three-line defense model to enterprise risk management, a concept endorsed by the Institute of Internal Auditors and published in January This framework helps ensure strong redundancies and preparation.
The CROs work together to ensure that our program is implemented consistently across the company. Consistency of process and terminology is extremely important and supports efficient risk communications to oversight committees and boards, between the subsidiaries, and to Intercontinental Exchange, the parent company.
The basic components of our enterprise risk management program include a Board-level Risk Appetite Framework and a management-level Operational Risk Framework. It establishes risk appetite statements, metrics and thresholds that allow monitoring and remediation of risk at a level appropriate to board oversight responsibilities.
The Operational Risk Framework establishes a formal process for management to identify risk, assess risk, monitor risk and report risk on an ongoing basis. It establishes appropriate risk limits and, as a result, provides a process for the second line to monitor risk. Our customers rely on us for the delivery of time-sensitive, up-to-date and high-quality financial market data, analytics and trading solutions.
We rely on redundant systems and detailed disaster recovery plans to deliver timely, reliable products and services to our customers. We operate an Information Security program that is designed to prevent, detect, track and mitigate cyber incidents. The Intercontinental Exchange Crisis Management team handles our end-to-end response to any potential issues and regularly conducts full-scale global drills to ensure our processes are ready to be implemented.
All mission-critical functions are tested for responsiveness and business continuity. Following each acquisition of a new company, this process is reviewed, enhanced and practiced to ensure crisis management procedures are in place across our entire organization. Our values define our culture and how we operate. They drive how we live and work each day. Our success rests on the fact that we operate as one company — one culture and one team.
Operating a global business is complex and regulatory and policy environments continue to change. This requires strong standards and procedures. We believe that strong leadership and governance continue to enhance and deliver stockholder value. We provide the relevant tools, resources and training to help employees succeed and to recognize ethical decision-making. We rely on a combination of online and instructor-led training sessions to ensure that all employees are well informed. We use regular communications throughout the year and intranet resources to help drive an ethical and legal-compliant culture.
Bribery Act prohibits all bribery of both government officials and private individuals, and includes facilitation payments in its prohibitions. We train and monitor our employees to ensure compliance with regulations across all markets where we operate. In , all six of our corporate compliance policies became available in 10 languages: These policies apply to all employees, consultants and contractors.
Additionally, certain employees are also subject to compliance policies that are business unit specific. We dedicate significant resources to provide training on these policies. New employees go through a detailed orientation program and all employees are required to take web-based training periodically throughout employment. These self-timed sessions provide specific feedback to employees and the global compliance team on areas that may require additional training.
Employment laws differ around the world and our ethics and compliance teams work together with our human resource professionals to promote a work environment that encourages transparency and accountability throughout our offices. We maintain a robust system for reporting misconduct and our employees are encouraged to raise any questions concerning ethics and report all concerns. Sprecher worked closely with the Federal Reserve to serve as its over-the-counter OTC derivatives clearing house.
In the absence of a central counterparty - which would guarantee pay-outs should a trading party be unable to do so - there was a high risk of massive market disruption  ".
Sprecher's clearing house cleared their global credit default swaps CDS in exchange for sharing profits with these banks. By Intercontinental Exchange had been named to the Fortune Future 50 determining the top 50 companies that are best positioned to adapt and deliver growth in a complex environment.
ICE was also named to the Fortune in June and is the only exchange operator included in the ranking. The Intercontinental Exchange has had a policy to grow through the acquisition of other exchanges, a number of these have been successful while others have failed due to concerns by regulators or others that the new company would have created a monopoly situation.
The major acquisition and attempted acquisitions have included:. The Manitoba Securities Commission oversee its operations.
Upon the closing of the transaction, Creditex Group became a wholly owned subsidiary of ICE, operating under the Creditex name. ICE was thought to be looking to acquire the American exchange's derivatives business, Nasdaq its cash equities business. The Justice Department , also in April, "initiated an antitrust review of the proposal, which would have brought nearly all U. In September , ICE announced that it had entered into a definitive agreement to acquire SuperDerivatives ,  a provider of risk management analytics, financial market data and valuation services.
Completion of the transaction was subject to regulatory approval and other customary closing conditions. The transaction successfully completed on 7 October In October , ICE announced that it had entered into a definitive agreement to acquire Interactive Data Corporation IDC , a provider of financial market data, analytics and related trading solutions, from Silver Lake, involved in technology investing, and Warburg Pincus, a private equity firm focused on growth investing.
The transaction completed on December 14, Trayport provides a trading technology platform that serves brokers, exchanges, clearing houses and trading participants, primarily in the European utility markets. In October it announced its decision to require ICE to sell Trayport, having ruled that the merger could lead to a substantial lessening of competition.
When completed, the acquisition will enable ICE to offer customers new data and valuation services. Under the terms of the agreement, ICE can elect to satisfy its payment of the purchase price due at the close of the transaction in either cash or shares of ICE's common stock.
All other terms of the agreement were not disclosed. Terms of the agreement were not disclosed, and the transaction is expected to close within 90 days, subject to regulatory approvals. The financial impact of the transaction will be immaterial and was included in ICE's financial guidance for The terms of the agreement were not disclosed, and the transaction is expected to be completed in the second half of The financial impact of the transaction is expected to be immaterial in In October ICE announced it has completed its acquisition.
In October , ICE announced it had acquired a 4. ICE anticipates having one representative join the Board of Euroclear. Euroclear is a leading provider of post-trade services, including settlement, central securities depositories and related services for cross-border transactions across asset classes.
The acquisition was reportedly completed on January 2, as announced by ICE. In April , ICE announced that it had entered into an agreement to acquire the Chicago Stock Exchange CHX , a full-service stock exchange, including trading, data and corporate listings services. The transaction is expected to close in the second quarter of , subject to regulatory approvals. Terms of the transaction were not disclosed, and the financial impact will not be material to ICE or impact capital return plans.
Established in , TMC Bonds is a fixed income marketplace, supporting anonymous trading in various asset classes including Municipals, Corporates, Treasuries, Agencies and Certificates of Deposit. The transaction is expected to close in the second half of , subject to customary regulatory and anti-trust approvals, and is not expected to materially impact financial results or capital returns.
Price and terms of the transaction were not disclosed and will not be material to ICE's earnings or have an impact on capital return plans. ICE provides exchange trading and clearing services in a number of different markets. Its main products include:. ICE originally formed its ICE Data subsidiary in , recognizing the rising demand for exchange data as markets became increasingly automated. ICE continues to invest in its data services to address evolving customer needs driven by regulatory reform, market fragmentation, passive investing and indexation, along with increased demand for data capacity and security, and independent valuations.
Their customers include global financial institutions, asset managers, commercial hedging firms, risk managers, corporate issuers and individual investors. In August Intercontinental Exchange announced that it planned to form a new company, Bakkt,  which is intended to leverage Microsoft cloud solutions to create an open and regulated, global ecosystem for digital assets.
The new company will work with a marquee group of organizations including Boston Consulting Group BCG , Microsoft , Starbucks , and others, to create an integrated platform that enables consumers and institutions to buy, sell, store and spend digital assets on a seamless global network.
The Bakkt ecosystem is expected to include federally regulated markets and warehousing along with merchant and consumer applications. Its first use cases will be for trading and conversion of Bitcoin versus fiat currencies , as Bitcoin is today the most liquid digital currency. As an initial component of the Bakkt offering, Intercontinental Exchange's U. These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies.
In addition, the clearing house plans to create a separate guarantee fund that will be funded by Bakkt.
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