IT SOFTWARE SOLUTIONS ShIPBroking and trading
Trading up There have been a number of developments as far as broking and trading systems are concerned
“Additionally listing CLTX fertiliser contracts at EEX will enable access to these products for an even wider network of partners
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The European Energy Exchange (EEX), in cooperation with Singapore-regulated Cleartrade Exchange (CLTX) launched an extension to its trade registration services for fertiliser contracts on 6 January 2015. The product offering includes six derivatives contracts for fertilisers, based on urea, diammonium phospate (DAP) and urea ammonium nitrate (UAN), for different delivery points in the US, Europe and North Africa. All products are cash-settled agreements settled against market indexes, published by Argus Media Limited, Fertecon Limited and CRU International Limited in “The Fertilizer Index” report. Owing to the small contract sizes of 25 tonnes, compared with the standard size of 500 tonnes, this move promotes increased flexibility for EEX customers. “Additionally listing CLTX fertiliser contracts at EEX will enable access to these products for an even wider network of partners,” says Richard Baker, chief executive of CLTX. “At the same time, it will be possible to clear transactions at a further clearing house, European Commodity Clearing (ECC).” “The launch of fertiliser contracts constitutes the entry of EEX into the agricultural derivatives segment, which we will complement with further products in May 2015,” says Peter Reitz, chief executive of EEX. “Furthermore, EEX will launch its offering for freight futures in January, which provides significant benefits for participants who are also active on the fertiliser markets.” With the clearing of freight and fertiliser products on one platform, market participants can hedge price fluctuations in the physical fertiliser markets and eliminate counterparty credit risk while at the same time optimising transport costs Richard Baker, chief executive of Cleartrade Exchange (CLTX)
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for fertilisers. By holding all positions at the same clearing house, participants benefit from netting effects, since ECC provides cross-margining across various markets and exchanges, including the CEGH Gas Exchange of the Vienna Stock Exchange, EEX, EPEX Spot, the Hungarian Power Exchange (HUPX), Powernext and PXE. EEX is the leading energy exchange in Europe. It develops, operates and connects secure, liquid and transparent markets for energy and related products on which power, natural gas, CO2 emission allowances, coal and guarantees of origin are traded. Through its majority shareholding in CLTX, EEX additionally offers the markets for freight, iron ore, fuel oil and fertilisers. Clearing and settlement of all trading transactions are provided by the clearing house ECC. EEX is a member of Eurex Group. Cleartrade Exchange also recently announced that it will provide trade registration and execution services for the full suite of LCH.Clearnet’s EnClear futures contracts. CLTX will be the only exchange to offer futures and options contracts on freight, fertilizer, iron ore, steel, coal and container freight for clearing at LCH. Commenting on this new phase of change in the longstanding relationship between LCH and CLTX, Baker said: “CLTX and LCH first collaborated in 2011, and since then we have enjoyed a close and successful relationship, which has seen over 1.5 million forward freight agreement (FFA) and fertiliser lots of CLTX transactions novated and cleared at LCH. CLTX has advanced straight-through-processing (STP) connections to the EnClear systems and this affords 95% of trades to be novated instantly, thus significantly reducing time between execution and clearing. “This exciting new development removes regulatory complexity for the dry bulk freight portfolio, and increases choice, opportunity and competitive advantage for our customers and the market as a whole. I am certain that the evolution of these markets