ICE Plans Mortgage Futures Contracts

Intercontinental Exchange announced that it plans to launch its first mortgage futures contracts on June 13, 2022, subject to regulatory approval. The two futures contracts will be cash-settled and based on the ICE U.S. Conforming 30-year Fixed Mortgage Rate Lock Index and the ICE U.S. Jumbo 30-year Fixed Mortgage Rate Lock Index. The indices are published daily and track U.S. residential mortgage loan applications where borrowers and lenders have committed to lock-in the interest rate prior to closing. By being underpinned by primary market rates, the futures contracts offer investors a more refined hedge to manage exposure to U.S. residential mortgage rates than the existing suite of available products. The primary market indices are part of a suite of 80 U.S. residential mortgage indices launched by ICE in October 2021, based on a daily data pool of tens of thousands of anonymized locked rate applications processed by ICE Mortgage Technology. ICE Mortgage Technology processes nearly half of all residential mortgages in the U.S. Securitized residential mortgages comprise about a third of the U.S. fixed income market, meaning that they occupy a large weighting in many fixed income portfolios institutionally and in the average American’s retirement portfolio. The contracts will trade on ICE Futures U.S. and clear through ICE Clear U.S. The ICE U.S. Residential Mortgage Locked Rate Indices are available over the ICE Index Platform.