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Winnipeg Commodity Exchange Inc. Will Offer Exchange For Risk (EFR) Transactions Beginning January 2003

Date 17/12/2002

Winnipeg Commodity Exchange Inc. (WCE) is pleased to announce the introduction of Exchange For Risk (EFR) as an allowable ex-pit transaction for all futures contracts effective January 2, 2003.

An EFR consists of two related transactions, an over-the-counter (OTC) transaction, and a futures transaction, in which a futures contract is exchanged as part of the OTC contract. OTC derivatives, which are eligible for the EFRs, are contracts executed outside of the regulated exchange environment whose value depends on (or is derived from) the value of an underlying related commodity.

The parties to the EFR must be under separate control and the buyer (seller) of the futures contract must be the seller (buyer) of the OTC contract. The EFRs will be executed ex-pit, in a similar manner to the WCE's Exchange For Physical (EFP) transactions. Market participants should reference WCE Rules for specific details.

Bruce Love, WCE Vice President of Marketing and Corporate Development, said the introduction of new transaction types is mainly in response to participants in the industry who are beginning to use more complex risk management techniques vis-à-vis over-the-counter derivatives.

"The introduction of EFRs are anticipated to provide a resourceful and efficient system for dealing with futures positions and OTC contracts," Love said. "This is expected to encourage more participation in our markets and strengthen the linkage to the OTC markets."

Winnipeg Commodity Exchange Inc., established in 1887, is Canada's only agricultural futures and options exchange. WCE offers futures contracts on canola, canola meal, flaxseed, domestic feed wheat, and western barley. Options contracts are available on canola, flaxseed, domestic feed wheat, and western barley.