UPDATE 1-London's Baltic Exchange to close ship futures platform Baltex

(Adds further detail, comment)

LONDON, July 31 (Reuters) - The Baltic Exchange will close its freight derivatives platform Baltex at the end of the year after a review, the London-run business said on Monday.

Baltex was launched by the centuries-old Baltic Exchange in June 2011 as the first central electronic marketplace for freight forward agreements (FFA), which allow investors to take positions on freight rates at a point in the future.

“Despite Baltex’s closure, the Baltic Exchange remains at the centre of the global FFA market and is steadfast in its support of it,” Baltic Exchange’s Chief Executive Mark Jackson said in a statement.

Singapore Exchange completed its 87 million pound ($114.19 million) acquisition of the Baltic in November.

Baltex, which has been run by a Baltic-owned unit, was previously loss making and subsequently became a venue for presenting block futures.

The Baltic Exchange reached a landmark agreement in 2014 with LCH, majority owned by the London Stock Exchange, allowing FFA trades to be cleared and reported via Baltex, which revitalised the platform.

The Baltic statement on Monday said the decision to close Baltex’s operations came after “a review of strategic options” following an announcement by LCH to end its FFA clearing services.

LCH said last month it would end freight clearing services by Dec. 29 amid slower volumes.

Transforming OTC (over-the-counter) derivatives into futures via a clearing house is known as futurisation.

The Baltic’s Jackson told Reuters earlier this year that Baltex provided a futurisation service to the industry.

The Baltic said on Monday it would apply to Britain’s Financial Conduct Authority for permission to cease carrying out regulated activities and Baltex would close by Dec. 29, subject to all regulatory approvals.

Founded in 1744 as a forum for chartering vessels, the Baltic Exchange now produces benchmark indexes for global shipping rates including for the multi-billion dollar FFA market. (Reporting by Jonathan Saul; editing by Jason Neely and Louise; Heavens)