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Norwegian clearing house first to launch salmon futures contracts


NOS Clearing, the Oslo-based clearing house for commodity derivatives and Fish Pool ASA, the Bergen-based seafood futures market, have launched the world’s first cleared futures contracts

NOS Clearing, the Oslo-based clearing house for commodity derivatives and Fish Pool ASA, the Bergen-based seafood futures market, have launched the world’s first cleared futures contracts for fresh salmon. This marks a world first for exchange traded seafood futures in the fast growing seafood derivatives market.

The service is being formally launched at the European Seafood Exhibition in Brussels, 24-26 April 2007, where NOS Clearing ASA and Fish Pool ASA will share a stand at the Norwegian Pavilion.

‘From now, financial seafood contracts can be traded in the market in the same way that Soya beans, coffee, wheat and meats are traded on the big international commodity exchanges. Introducing clearing of salmon contracts is a milestone in the development of the salmon market both in Norway and internationally,’ said FishPool’s Managing Director Søren Martens.

Clearing affords protection against credit risk to each party in a transaction. Because of the forward nature of financial commodity contracts, most participants have credit risk as their main concern. The risk of default is a powerful argument for clearing. Whatever happens, each party will be guaranteed settlements from NOS Clearing ASA.

‘The great thing with clearing is that every participant can be anonymous when trading because there is no credit risk. This means they can trade with every the other participant in the market place without concerns for credit, which helps to boost liquidity. Credit risk is not an issue when you are trading cleared contracts,’ explains Erik Flingtorp from NOS Clearing.

NOS Clearing, which previously cleared for the Nordic Power market NordPool, and which has been very successful in clearing freight futures for the International Maritime Exchange IMAREX, is offering a tailored market solution with a choice for clients of direct membership at NOS or indirectly trading via existing clearing members.

Those who wish to trade can choose between direct clearing membership at NOS Clearing, or trading via a bank with an existing clearing membership. The bank will in turn would arrange cash services and collateral for the client. NOS Clearing states it already has relations with most Nordic banks and many of the largest international merchant banks.

‘The key advantage for the seafood marked is the freedom of choice being offered. Contracts traded at Fish Pool settle in Norwegian Kroner (NOK1 = USD 0.16) which combined with NOS Clearing’s clearing network, makes access to the market both fast and easy,’ says Flingtorp.
Investments in the seafood market is a part of the long term strategy for IMAREX NOS ASA in offering trading and clearing services to new and exciting commodity markets. The first step in the seafood sector was taken in February 2007, when IMAREX NOS ASA bought 34% of the shares in Fish Pool, with an option to acquire a majority stake.

‘We are building a solid seafood exchange for Norwegian and International participants where creating liquidity is alpha-omega for everyone. Clearing services from NOS Clearing is an important corner stone for us to reach critical mass in the trading volumes at Fish Pool,’ concludes Martens.

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