Agora-X will offer clearing through CME ClearPort of over the counter (OTC) grain swaps negotiated on the Agora-X electronic communications network. CME Group announced March 19 that the Commodity Futures Trading Commission has granted an exemption to the Chicago Mercantile Exchange and the Board of Trade of the City of Chicago to clear certain OTC corn basis swaps and calendar swaps for corn, wheat and soybeans. Agora-X plans to roll out its clearing functionality in conjunction with the April 6 launch date through CME ClearPort of the CBOT OTC grain swaps.
The Agora-X ECN, launched in December, enables institutional market participants to efficiently negotiate OTC transactions in commodity and derivative contracts, including bilateral negotiation of OTC grain swaps and swaptions. The platform now will have the capability of sending certain of these transactions through CME ClearPort, a set of flexible clearing services open to market participants that eliminates third-party credit risk and provides capital efficiencies across a wide range of asset classes.
"As Agora-X moves forward, our efficiency and convenience will make a dramatic difference for OTC commodity trading. Until now, OTC trading has been quite antiquated. Traders are bombarded with instant messages, phone calls or e-mails, making it cumbersome to maintain a real-time sense of the market. Agora-X provides a smooth, seamless, efficient marketplace, and in conjunction with CME ClearPort, electronic centralized clearing capability. The Agora-X platform provides complete trade audit trail, which allows OTC commodity markets to be transparent. When markets are transparent, they will become more efficient, liquid and open," said Brent M. Weisenborn, Chief Executive Officer, in a company release.
As previously announced, Agora-X also has launched a new exempt commercial market for OTC trading in energy, metals and other commodity contracts, with clearing of certain contracts provided through CME ClearPort.