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INTRODUCTION OF OTC MINI FUEL OIL AND HANDYSIZE TIME CHARTER FFA CLEARING ON 1 JUNE 09
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The Exchange is pleased to annouced that it will be extending its SGX AsiaClear®’s suite of OTC products to include the following four new contracts from Monday,1 June 09:
1) OTC Mini Fuel Oil 180cst Swap
2) OTC Mini Fuel Oil 380cst Swap
3) OTC Handysize Time Charter Basket FFA
4) OTC Half-Day Handysize Time Charter Basket FFA
Mini Fuel Oil Swap Contracts
In response to market feedback, the unique OTC Mini Fuel Oil Swap contracts will facilitate hedging and clearing of odd lots and crack spreads. These Mini Fuel Oil Swap contracts are in most aspects similar to the existing suite of Fuel Oil Swap contracts except for its reduced contract size of 100 metric tons.
The Mini Fuel Oil Swap contracts will be cash-settled at the end of each month using the arithmetic average of Platts daily spot assessments in the contract month, rounded to three decimal places.
Similar to the existing Fuel Oil Swap contracts, there will be up to 15 consecutive contract months, starting with the current contract month available for clearing. On the first day of clearing, the first contract month to be listed is July 2009.
Margin and position offsets for positions of the same contract month will be given, using a ratio of ten Mini-sized Fuel Oil Contracts to one respective Regular-sized Fuel Oil Contract. Margin offsets are automatic while position offsets will be effected after the submission of a position transfer request via STAR to the SGX Clearing House by the Clearing Member.
Handysize Time Charter and Half-Day Handysize Time Charter Contracts
The addition of the Handysize Time Charter Basket FFAs complements our Dry FFA Time Charter product suite. The Handysize Time Charter Basket is an average of 6 Handysize time charter routes.
Each Handysize Time Charter FFA Contract and Half-Day Handysize Time Charter FFA Contract is equivalent to an exposure of 1 and ½ day of the Handysize Time Charter Basket respectively. The contract will be cash settled at the end of the month using the arithmetic average of all Baltic daily spot assessments in the contract month for the Handysize Time Charter FFAs, rounded to 1 decimal place.
Up to 72 consecutive contract months will be available for clearing. The first contract month that will be listed is June 2009.
The Half-Day Handysize Time Charter FFA Contract will be eligible for margin and position offset, using a ratio of two Half-Day Contracts to one respective Full-Day FFA Contract. Margin offsets are automatic while position offsets will be effected after the submission of a position transfer request via STAR to the SGX Clearing House by the Clearing Member.
The detailed contract specifications of these new contracts are provided in Appendix A. Amendments to the SGX-DC Clearing Rules on the Final Settlement Prices for these new contracts are provided in Appendix B. Clearing fees schedule for the new contracts are provided in Appendix C.
We look forward to your fullest support and participation in facilitating the broking and clearing of the Mini Fuel Oil Swaps and Handysize Time Charter FFA contracts.
For further enquiries, please contact Mr Yeo Ek Meng (Tel: 6236-5145) or Mr Kenneth Ng (Tel: 6236-8388) of SGX AsiaClear. Alternatively, you may wish to email your questions to asiaclear@sgx.com.
For more information on the above contracts, please click here.
Issued on: 20 May 2009
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