rr-26-16.pdf

us-irs-revenue-rulings-rr-26-16rr-26-16.pdfGuidance

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Part I

Section 1256.—Section 1256 Contracts Marked to Market

(Also §§ 446, 481, 7805; 1.446-1, 301.7805-1).

Rev. Rul. 2026-16

ISSUE

Is ICE Endex, which is a regulated exchange of the Netherlands, a qualified board or
exchange within the meaning of § 1256(g)(7)(C) of the Internal Revenue Code (Code)
1
?
FACTS
ICE Endex is a regulated exchange of the Netherlands.
On December 23, 2011, the Commodity Futures Trading Commission (CFTC)
published final rules regarding the registration with the CFTC of foreign boards of trade
(FBOT). See Registration of Foreign Boards of Trade, 76 FR 80674 (Dec. 23, 2011),
codified at 17 CFR Part 48, and as amended by 89 FR 66201 (Aug. 15, 2024). The

1
Unless otherwise specified, all “Section” or “§” references are to sections of the Code or the Income Tax
Regulations (26 CFR Part 1).

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effective date for the final rules generally was February 21, 2012. Under the CFTC
FBOT registration system, the CFTC may issue an Order of Registration to an FBOT,
allowing the FBOT to provide direct access to its electronic trading and order matching
system from the United States.
On January 10, 2017, the CFTC granted an Order of Registration to ICE Endex
under the CFTC FBOT registration system. An FBOT’s status under the CFTC FBOT
registration system is posted online by the CFTC.
LAW
Section 1256(g)(7) provides that the term “qualified board or exchange” means:
(A) a national securities exchange that is registered with the Securities and
Exchange Commission,
(B) a domestic board of trade designated as a contract market by the CFTC, or
(C) any other exchange, board of trade, or other market that the Secretary of the
Treasury or the Secretary’s delegate determines has rules adequate to carry out the
purposes of § 1256.
HOLDING
The Internal Revenue Service determines that ICE Endex, which is a regulated
exchange of the Netherlands, is a qualified board or exchange within the meaning of
§ 1256(g)(7)(C) as long as ICE Endex holds a valid Order of Registration under the
CFTC FBOT registration system.
PROSPECTIVE APPLICATION
Under the authority of § 7805(b)(8), this revenue ruling is effective for ICE Endex

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Contracts entered into on or after September 1, 2026. For purposes of this revenue
ruling, the term “ICE Endex Contracts” means futures contracts and futures contract
options that are traded on or subject to the rules of ICE Endex, that are described in
§ 1256(g)(1)(A), and that are not covered by the exception in § 1256(b)(2).
CHANGE IN METHOD OF ACCOUNTING
A change in the treatment of ICE Endex Contracts to reflect the determination made
in this revenue ruling is a change in method of accounting within the meaning of §§ 446
and 481 and the regulations thereunder. The Commissioner of Internal Revenue grants
consent to a taxpayer to change its method of accounting for ICE Endex Contracts
entered into on or after September 1, 2026, to the § 1256 mark-to-market method for
the first taxable year during which the taxpayer holds such contracts. The requirement
to file a Form 3115, Application for Change in Accounting Method, in § 1.446-1(e)(3)(i)
is waived. The change is made on a cut-off basis and is inapplicable to ICE Endex
Contracts that were entered into before September 1, 2026. Because the change is
made on a “cut-off” basis, there is no potential omission or duplication of income or
deductions, and an adjustment under § 481 is neither permitted nor required.
DRAFTING INFORMATION
The principal author of this revenue ruling is Shawn Tetelman of the Office of
Associate Chief Counsel (Financial Institutions & Products). For further information
regarding this revenue ruling, contact Shawn Tetelman at (202) 317-7053 (not a toll-free
number).

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