CONTAINERISED WHITE SUGAR FUTURES TRADING BEGINS JUNE 20, 2016

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1 CONTAINERISED WHITE SUGAR FUTURES TRADING BEGINS JUNE 20, 2016

2 WHY IS A CONTAINERISED CONTRACT NEEDED? Developments in the physical market for white sugar exports have stimulated requests for the exploration of containerised delivery procedures as an alternative to the existing break bulk delivered futures. Since the acquisition of the former Liffe softs markets, ICE has been working with the trade and industry to develop a container delivery mechanism for futures contracts. Industry estimates of the total exports of refined sugar in containers range from 60-80% Consumption trending towards purchases in container increments limited demand for full vessels Many commercially relevant ports (both at origin and destination) have concentrated logistics investments to accommodate container shipping Smaller dry-bulk vessel fleet is shrinking globally, especially relative to container freight availability Containers offer expedited loading and minimize weather-related delays INTERCONTINENTAL EXCHANGE 2

3 APPROXIMATELY TWO-THIRDS OF EXCHANGE QUALITY REFINED SUGAR EXPORTS ARE SHIPPED IN CONTAINERS Estimated shipments from the top five Exchange-delivered origins INTERCONTINENTAL EXCHANGE 3

4 KEY TRADING CONTRACT TERMS ALL OF THESE TERMS ARE IDENTICAL TO THE EXISTING WHITE SUGAR CONTRACT Containerised White Sugar futures will trade alongside the benchmark White Sugar futures contract, with identical quality standards for the underlying deliverable supply. DELIVERABLE SUGAR QUALITY PARAMETERS CONTRACT SIZE TICK SIZE TRADING MONTHS FIRST NOTICE DAY White beet or cane crystal sugar or refined sugar of the current crop at the time of loading Minimum polarisation: 99.8 degrees Maximum moisture: 0.06 per cent Maximum colour: 45 ICUMSA Fifty Tonnes 10 cents per tonne ($5 per lot) March May August October December Fifteen (15) calendar days prior to the delivery month INTERCONTINENTAL EXCHANGE 4

5 KEY CONTRACT TERMS THAT ARE DIFFERENT The key differences between the containerised and conventional futures contracts are the delivery terms and the list of eligible ports CONTRACT White Sugar Futures Containerised White Sugar Futures DELIVERY TERMS Delivered free on board and stowed in break bulk vessels in accordance with Rule 7 of RSA Rules relating to contracts Delivered free on board in ISO Containers at a Container Port in accordance Rule 7 of RSA Rules relating to contracts ELIGIBLE PORTS 94 ports in 43 Countries 20 ports in 17 Countries INVOICE QUANTITY Contract Weight (50 MT) Net Shipped Weights INTERCONTINENTAL EXCHANGE 5

6 CONTAINER PORT LIST AMERICAS Buenos Aires, Argentina Paranagua, Brazil Santos, Brazil Buenaventura, Colombia Acajutla, El Salvador Puerto Quetzal, Guatemala EUROPE Antwerp, Belgium Le Havre, France Hamburg, Germany Rotterdam, Netherlands Gdynia-Gdansk, Poland Felixstowe, UK MIDDLE EAST, AFRICA, SOUTH ASIA Mundra, India Durban, South Africa Jeddah, Saudi Arabia Jebel Ali, UAE SOUTH-EAST ASIA Penang, Malaysia Port Kelang, Malaysia Bangkok, Thailand Laemchabang, Thailand INTERCONTINENTAL EXCHANGE 6

7 DELIVERY TIMELINES BUYERS NOMINATION (T-14) BUYER ASSIGNS SUPERVISOR CONTAINERS LOADED OVER RAIL BUYER Buyer books container freight and submits nomination in the form of the booking reference 14 days prior to delivery Buyer has the right to assign a supervisor to jointly oversee the stuffing Shipping line loads container onto the vessel. Costs associated with delays or substitutions for the account of the buyer Shipping Line generates B.O.L. NOTICE DAY SELLER IDENTIFIES LOADING LOCATION (T-13) COLLECTION AND STUFFING CONTAINERS RETURNED TO YARD PAYMENT BASED ON B.O.L. SELLER Seller s Delivery Notices submitted to Exchange and Clearing House Seller notifies buyer of loading location to allow buyer to secure supervision Seller collects the empty containers from the container yard and transports them to the stuffing location Suitable containers are stuffed after lining the floors and walls with kraft paper Seller returns sealed containers to the yard by the terminal stack closing date Risk passes to the buyer Documents presented to the Exchange Payment processed, title transferred and margin returned Costs and labour are for the account of the seller INTERCONTINENTAL EXCHANGE 7

8 BUYER AND SELLER DELIVERY RESPONSIBILITIES INTERCONTINENTAL EXCHANGE 8

9 PROTECTIONS FOR BUYERS AND SELLERS To account for the complexities of delivering sugar in containers at the Seller s choice of location, the Containerised White Sugar Futures contract has adopted several terms to facilitate efficient deliveries and mitigate risks to the counterparties. Alignment with and reference to RSA Rules for FOB contracts for shipment by containers, a standard and well understood industry standard Curated initial port list to ensure contract performance and market confidence history of unobstructed container deliveries expansive list of destination ports served by the shipping lines highly liquid container freight market Controls on Loading rates that can be requested and required Buyer must make containers available in sufficient time to allow loading, and sellers may require a full seven days Buyer may request to load any amount, but may only require ¼ of tender in one week Seller must be prepared to stuff and return to container yard ¼ of tender in any one week Minimum bookings (10 containers) to ensure cost efficiency deliveries INTERCONTINENTAL EXCHANGE 9

10 WHITE SUGAR VS. CONTAINERISED WHITE SUGAR FUTURES CONTRACT TERMS CONTRACT SYMBOL W CS CONTRACT SIZE Fifty Tonnes Fifty Tonnes PRICE QUOTATION US Dollars and cents US Dollars and cents CONTRACT LISTING March, May, August, October, December March, May, August, October, December DELIVERY TERMS FOB and stowed in break bulk vessel FOB in ISO containers DELIVERY POINTS 94 ports in 43 Countries 20 ports in 17 Countries QUALITY STANDARDS DELIVERABLE GROWTHS White beet or cane crystal sugar or refined sugar Current Crop at the time of loading free running of regular grain size and fair average of the quality of the crop Minimum polarisation: 99.8 degrees Maximum moisture: 0.06 per cent Maximum colour: 45 ICUMSA White beet or cane crystal sugar or refined sugar Current Crop at the time of stuffing free running of regular grain size and fair average of the quality of the crop Minimum polarisation: 99.8 degrees Maximum moisture: 0.06 per cent Maximum colour: 45 ICUMSA Sugar shall be delivered at a port in the country Sugar shall be delivered at a port in the country of of origin of the sugar or customary port of export origin of the sugar or customary port of export FIRST NOTICE DAY Fifteen (15) days before the delivery month Fifteen (15) days before the delivery month LAST TRADING DAY Sixteen (16) days before the delivery month Sixteen (16) days before the delivery month INTERCONTINENTAL EXCHANGE 10

11 LAUNCH: JUNE 20, 2016* FIRST DELIVERY MONTH: OCT-16* *Following the satisfactory completion of applicable regulatory processes INTERCONTINENTAL EXCHANGE 11

12 WHY TRADE ON ICE? LEADING MARKET FOR COMMODITIES TRADING AGRICULTURAL COMMODITIES ICE became the center of global trading in soft commodities with its acquisition of the New York Board of Trade in Now known as ICE Futures U.S., the exchange offers futures and options on futures on soft commodities including coffee, cocoa, sugar, cotton and frozen concentrated orange juice. Sugar No. 11 is the benchmark contract for the global sugar market which is one of the world's ten largest agricultural futures markets. ICE Futures Europe also offers leading softs markets including cocoa, Robusta coffee, white sugar and feed wheat futures and options providing a range of global soft commodity products on the ICE platform. ICE Futures Canada lists the leading canola futures contract, a popular oilseed. theice.com/agriculture INTERCONTINENTAL EXCHANGE 12

13 FURTHER INFORMATION TIM BARRY TOBY BRANDON DAVID FARRELL MATT RYAN Vice President, Product Development Intercontinental Exchange Director, Soft Commodity Operations Intercontinental Exchange Senior Director, Global Soft Commodity Operations Intercontinental Exchange Senior Director, Ags and Soft Commodities Intercontinental Exchange DISCLAIMER 2015 Intercontinental Exchange, Inc. The information and materials contained in this document - including text, graphics, links or other items - are provided "as is" and "as available." ICE and its subsidiaries do not warrant the accuracy, adequacy or completeness of this information and materials and expressly disclaims liability for errors or omissions in this information and materials. This document is provided for information purposes only and in no way constitutes investment advice or a solicitation to purchase investments or market data or otherwise engage in any investment activity. No warranty of any kind, implied, express or statutory, is given in conjunction with the information and materials. The information in this document is liable to change and ICE undertakes no duty to update such information. You should not rely on any information contained in this document without first checking that it is correct and up to date. The content of this document is proprietary to ICE in every respect and is protected by copyright. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of ICE. All third party trademarks are owned by their respective owners and are used with permission. Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at Safe Harbor Statement under the Private Securities Litigation Reform Act of Statements in this presentation regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in Intercontinental Exchange, Inc. s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on February 5, INTERCONTINENTAL EXCHANGE 13