The Baltic Exchange’s electronic trading platform, Baltex, has today (Monday 1 Dec) launched a Block Trade Facility which allows brokers to continue using LCH.Clearnet’s clearing services now that the London based clearing house has re-classified its dry bulk freight derivatives as futures contracts.
Baltex, which is regulated by the UK’s Financial Conduct Authority, is being used by FFA brokers Clarksons Securities, SSY Futures, ICAP Shipping and GFI to report their clients’ trades. It is only by being reported to a suitably regulated trading venue like Baltex that these trades can be considered as futures. The overall objective is to increase post-trade transparency in the dry FFA market.
The new facility will allow Baltex members to track their own trades throughout the trading day and to view and export a complete list of all trades reported to Baltex at the end of the day. The list of all trades will also be available on the Baltic website and, in due course, will be made available via quote vendors. In addition, the facility will help traders to satisfy their EMIR reporting requirements without compromising anonymity.
Baltex Chief Operating Officer Paul Stuart-Smith said:
“We are delighted to be working with most of the main brokers on this initiative and that Baltex is playing a vital role in helping the FFA market to adapt to regulatory changes. In order to make the transition to futures as straightforward as possible, brokers can continue to submit their trades for clearing in the usual way but these are now simultaneously reported to Baltex in real time via straight through processing. This initiative also helps to ensure that the Baltic Exchange retains its position at the heart of the global freight derivatives market and its importance in a rapidly changing regulatory environment.”
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Notes to editors
Baltex is a central, neutral and FCA approved Multilateral Trading Facility for dry freight derivatives developed by the Baltic Exchange, the world’s only independent provider of daily dry bulk shipping indices and route assessments.
The Baltic Exchange is the world’s only independent source of maritime market information for the trading and settlement of physical and derivative contracts. Its international community of over 600 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic.
Baltic Exchange members are responsible for a large proportion of all dry cargo and tanker fixtures as well as the sale and purchase of merchant vessels.
Baltic Exchange services
• Independent, high quality dry, wet and gas freight market information
• Self-regulated chartering, sale and purchase and freight derivatives markets
• Central forum for competing freight market interests
• Framework ensuring high standards of business practice and co-operation
• London-based business facilities for members