LCH.Clearnet expands into shipping derivatives

LCH.Clearnet will begin clearing shipping derivatives in July in addition to its established business clearing energy futures.

This new service will be partially facilitated by a new online trading platform, CIF, owned by Clarkson Securities, Ifchor, and Freight Investor Services.

LCH.Clearnet’s director of customer and market management said, however, that the service would not be completely dependent on this new platform and that it would also clear voice-brokered and bilateral trades.

LCH.Clearnet will clear forward-freight agreements, which are traded in the over-the-counter market, based on five oil-tanker routes and seven dry bulk commodities routes. This will put the company in direct competition with the New York Mercantile Exchange (Nymex) and with Nos Clearing, which is based in Oslo.

LCH.Clearnet, the largest clearing house in Europe, already competes with Nymax in clearing energy futures. The move of LCH.Clearnet into the shipping derivatives business shows a growing interest in a market that has tripled in the past three years.

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