Agora-X has launched an electronic communications network that enables institutional market participants to negotiate over the counter transactions in commodity and derivative contracts
Agora-X has launched an electronic communications network that enables institutional market participants to negotiate over the counter transactions in commodity and derivative contracts.
The network is designed to enable institutional participants to obtain best prices in a more liquid and transparent OTC marketplace.
In January, Agora-X plans to launch its exempt commercial market to handle financially-settled option "look-alikes" in energy, metals and other non-agricultural commodities, as well as commodity swaps and swaptions in those fields.
As a separate component using Agora-X technologies, the exempt commercial market will allow negotiation, execution and clearing of OTC trades in exempt commodities.
Brent M Weisenborn, chief executive officer of Agora-X, says: "As Agora-X goes live, our efficiency and convenience will make a dramatic difference for OTC commodity trading. Until now, traders had to negotiate each transaction in a time-consuming series of phone calls, instant messages or e-mails. Our electronic platform brings offers and bids together to provide efficient negotiation, improved price visibility, and greater liquidity for market participants.’
As previously announced, Agora-X has filed a petition with the US Commodity Future Trading Commission seeking an exemption under Section 4(c) for the Agora-X electronic communications network to provide clearing of trades in agricultural swaps and swaptions.
Current rules allow clearing of OTC trades for other types of commodity contracts, but not agricultural swaps and swaptions, unless a marketplace obtains a specific exemption.
In addition, Agora-X has submitted a petition to the Commission to amend Rule 35 to enable clearing industry-wide of OTC agricultural swaps and swaptions. If Part 35 is amended, the 4(c) exemption would not be necessary.
