SGX Partners With Baltic Exchange For Forward Freight Agreements

The Singapore Exchange (SGX) today announced that it has signed an agreement with Baltic Exchange whereby the Baltic Exchange will provide its benchmark prices for the settlement of Forward Freight Agreements (FFAs) for dry bulk and wet tanker dirty routes cleared on SGX OTC Clearing. It will also provide its forward curve price assessments to facilitate accurate margin calculation.

This collaboration supports SGX’s efforts in developing its clearing facility for a wide suite of over-the-counter (OTC) FFA products that meet the needs of commodity trading and shipping participants. It aligns the SGX OTC FFA clearing services with industry practice.

Mr Seck Wai Kwong, Senior Executive Vice President and Head, Strategy and Business Development Group of SGX said, "We are delighted to develop this partnership with Baltic Exchange, the leading international freight price assessment and benchmark provider. The use of Baltic Exchange’s freight benchmarks is very important for SGX’s clearing of Forward Freight Agreements as it is well recognised by FFA market participants."

Mr Jeremy Penn, CEO of Baltic Exchange, said, "We are pleased to collaborate with the Singapore Exchange in providing our prices for its settlement of FFAs and forward curve rates for the management of margins. Singapore is strategically-located in its region as an important maritime centre, and this development of a clearing facility for FFAs should further enhance freight derivatives trading and risk management activities in Asia."