The Baltic Exchange’s electronic trading platform, Baltex, has 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.”