Cleartrade Exchange (CLTX), the Singapore Regulated Futures Exchange, today makes available its daily settlement price feed for partner clearing houses. This is part of the exchange's continued mission to add stability and transparency to the critical daily settlement process for its bulk commodity futures contracts.
CLTX’s daily settlement methodology captures activity on its markets through a transparent process with the output data available to CCP’s via secure FTP link. As many of the products listed by the exchange have previously been opaque OTC markets, this is the first time that the industry has had a standardised and transparent system for calculating these prices.
Scott Sweden, Business Development Manager, CLTX, said “For some time our members have been asking us to provide a venue and methodology for establishing daily settlement prices. Interest has been particularly strong from the markets where currently futures contracts are less liquid.”
Sweden continues, “We have listened to our clients and now completed a project to provide this pivotal market function with support from several of our broker and end user members. The first of our CCP partners to use CLTX daily settlement prices will start doing so from the 1st of December with the next coming online in early January 2015.”
Shahnawaz Islam, Steel Derivatives Trader, Stemcor voiced his support for the initiative. “This is great news for the European steel futures industry. Providing a transparent forward curve through a futures exchange will help Stemcor and others to boost market participation. CLTX has been active in seeking the market’s input on their methodology and I am confident that the output will deliver an efficient and transparent mark for our positions."
Antonio Novi, Senior Trader, Levmet said “In a developing derivatives market, there can sometimes be disconnection between the reported settlement curve and recent trades in the market. The effect of this cannot be understated. The perceived benefits of hedging are undermined if new market participants, not overly familiar with financial markets, place trades and then find themselves immediately marked out of the money against an erroneous closing price. The transparency of CLTX’s market window enables all users to see the inputs which formulate the end of day number, a fact that we hope will help us to continue building this market.”