The IRS Has Pulled a Dutch Gas Exchange Into Section 1256. It Applies to Contracts Entered Into From Today.

Internal Revenue Bulletin 2026-36, dated August 31, 2026, contains a short revenue ruling with a specific date attached to it. Rev. Rul. 2026-16 holds that ICE Endex - a Netherlands-regulated exchange trading European gas and power contracts - is a qualified board or exchange for the purposes of section 1256. The ruling applies to contracts entered into on or after September 1, 2026.

Why the label matters

Section 1256 is a self-contained tax regime for certain futures and options. Two features distinguish it from ordinary capital gains treatment.

• Each section 1256 contract held at the close of the taxable year is treated as sold for its fair market value on the last business day of that year, and the gain or loss is taken into account then. There is no waiting for a sale.
• Gain or loss is treated as 40% short-term capital gain or loss and 60% long-term capital gain or loss - the 60/40 split - regardless of how long the contract was actually held.

A contract only enters that regime if it is a regulated futures contract, and the statute defines one as a contract where the amount required to be deposited and the amount which may be withdrawn depend on a system of marking to market, and which is traded on or subject to the rules of a qualified board or exchange. The exchange label is the gate.

Three ways to be a qualified board or exchange

Section 1256(g)(7) offers three routes: a national securities exchange registered with the Securities and Exchange Commission; a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission; or, under subparagraph (C), any other exchange, board of trade or other market which the Secretary determines has rules adequate to carry out the purposes of the section.

ICE Endex is neither of the first two. It is regulated in the Netherlands, with operations in Amsterdam and London, and it lists gas and power contracts including TTF, the continental European gas benchmark. So the ruling proceeds under subparagraph (C), which requires an affirmative determination by the Secretary. That determination is what Rev. Rul. 2026-16 is.

The condition attached

The holding is not unconditional. It applies so long as ICE Endex maintains a valid foreign board of trade order of registration with the CFTC. The CFTC granted that order on January 10, 2017; the exchange announced it on January 12, 2017, saying it could then offer U.S.-based members and participants direct access to its electronic order entry and trade matching system.

The dependency runs one way. If the CFTC registration lapses, the basis the ruling rests on goes with it.

Changing method without filing a form

For a taxpayer already holding ICE Endex positions, moving them into section 1256 treatment is not a free adjustment. The ruling states that a change in the treatment of ICE Endex contracts to reflect its determination is a change in method of accounting within the meaning of sections 446 and 481. The IRS grants consent to that change, waives the Form 3115 requirement and applies it on a cut-off basis - consistent with the ruling being effective only for contracts entered into on or after September 1.

The ruling was drafted in the Office of Associate Chief Counsel (Financial Institutions and Products). The principal author listed is Shawn Tetelman.