Baltic Exchange, LCH.Clearnet in tie-up talks on ship futures platform

LONDON, June 20 Fri Jun 20, 2014 9:12am EDT

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LONDON, June 20 (Reuters) - London's Baltic Exchange and clearing house LCH.Clearnet are in talks about a tie-up over the Baltic's freight derivatives platform, the two groups said on Friday.

Volumes have remained low on the loss-making Baltex multilateral trading facility since it started in June 2011. It is the first central electronic marketplace for freight forward agreements (FFA).

"We are finalising arrangements with LCH.Clearnet, which clears about 70 percent of the dry bulk FFA market, to enable them to transform OTC (over-the-counter) derivatives into futures in response to certain rule changes," the Baltic's outgoing chairman Quentin Soanes wrote in the exchange's annual report published on Friday.

LCH.Clearnet Ltd, a unit of the London Stock Exchange , confirmed on Friday it was in discussions with the Baltic Exchange about a tie-up. (Reporting by Jonathan Saul; editing by Jason Neely)

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