General Clearing Members help IMAREX NOS expand freight market universe

A GCM is a financial institution which takes a position in between a principal and the clearing house thereby offering access to clearing for non-clearing members of an exchange. A GCM is entitled to clear its own transactions and those of its customers.

NOS and IMAREX last week announced that MAN Financial and Macquarie Bank have joined as General Clearers.

The Macquarie Group is headquartered in Australia, where it is a leading provider of a full range of investment banking, financial markets and financial services. Macquarie Bank was listed on the Australian Stock Exchange in 1996 and currently employs over 9000 people in 24 countries.

“We believe that clearing will become fundamental to the continued growth of the Forward Freight Agreements [FFA] derivatives market as not only will simplify credit concerns for existing market participants it will become the focal entry point for new sources of capital,” says Mark Fitzpatrick, Head of Derivatives Clearing at Macquarie Bank in London.

MAN Financial has offices around the world, and is a leading participant on the major securities and futures exchanges world-wide, now also IMAREX and NOS. On many of these exchanges MAN is the leader by volume, primarily due to its institutional client base, which is attracted by specialised desks, experience, and market knowledge.

"The freight market shows enormous potential for us as clearing brokers. IMAREX and NOS is a leading market place, so it is natural for us to be a clearing member there”, says Ben Few-Brown, Director with MAN Financial in London.

Until recently the only way to clear freight derivatives at NOS was to be a direct clearing member. This simple model of direct principal-to-principal transactions cleared under a common rulebook by a single clearing house, has worked very well in building up liquidity in the FFA markets.

The majority of contracts cleared at NOS are matched by IMAREX, but third party FFA brokers are also making an important contribution.

"Two major GCMs have recently joined us, and are now offering their clearing services to both existing and prospective clients," says NOS CEO Morten Erichsen. "We will be adding several more in the months to come."

The joining of GCMs at NOS signals a strategic shift for IMAREX NOS. As the number of freight market investors grows, there is an increasing need for a practical way to access clearing, as most new players do not have credit lines in the market.

"Both NOS and IMAREX have spent the last five years investing in trading and clearing infrastructure for the freight market. With the relevant infrastructure in place, we are now ready to ramp up activity and bring the cleared freight market to a much wider audience. Working with the professional GCMs is a key part of that strategy," concludes Erichsen.

NOS now clears the lion's share of all cleared FFA contracts world wide.

For more information, please contact:

• Morten Erichsen, CEO, NOS ASA +47 2325 9300 me@nos.no
• Tom Even Mortensen, CEO IMAREX NOS ASA +47 2389 4222 tem@imarex.com