Freight, FX & Clearing – Deutsche Bank Partners with NASDAQ OMX’s NOS Clearing: A Closer Look

In the world of FX, brokers and traders get most of the headlines,but the industry casts a much wider net.

nos clearingIn the world of FX, brokers and traders get most of the headlines,but the industry casts a much wider net. One area of activity is in the freight business, where participants are active in hedging commodity and currency costs. Tapping into this market, the NASDAQ OMX purchased Oslo based NOS Clearing, a global leader in providing clearing services to the freight industry. NOS Clearing provides clearing and derivatives products in areas such as freight prices, fuel oil, seafood, and FX.

The FX unit was launched in September 2011 as an add-on feature to assist freight companies and cross-border business to handle currency risk and trading needs. Upgrading this unit’s offering, the NASDAQ OMX announced earlier this week that it had partnered with Deutsche Bank to provide FX trading and liquidity services from the bank (entire press release below). Learning more about this partnership, and the role of FX in the freight industry, Forex Magnates spoke to a reprehensive of NASDAQ OMX & NOS Clearing for more information.

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FM: What type of clients are typically clearing FX with NOS Clearing?

“The FX clearing services is at this moment aimed at customers of the NOS clearinghouse that wish to trade or hedge FX. They are predominantly within the Shipping, Energy and Fishing industry but the service is also suitable for smaller to medium sized banks and brokers as well as corporations with FX exposure.”

FM: Does FX clearing compose of a substantial part of NOS Clearing?

“The service was recently launched and has received significant interest as participants realize the efficiency it brings.”

FM: The FX clearing unit was launched on September 2011, until the current Deutsche Bank partnership, has there been any OTC Product clearing or was the unit only clearing exchange based products?

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“The service offers OTC FX trading and clearing and is in production with trades being executed and cleared. In conjunction with NASDAQ OMX’s acquisition of NOS the service was evaluated and revitalized in the autumn through the buyout of IMAREX that now acts as the dedicated sales and customer onboarding channel of Autobahn and NOS clearing.”

FM: How does the relationship with Deutsche Bank work, Nasdaq OMX is the introducer to DB, or is there a branded version of Autobahn that Nasdaq OMX will be providing to clients?

“As mentioned above the introducer is IMAREX which is a firm with extensive experience and relationships within the Shipping, Energy, Fishing industry and with a long and successful track record in FX trading. IMAREX is the sales channel for NOS and Deutsche Bank’s Autobahn platform and helps with customer onboarding and training. The Autobahn platform is not white labeled or branded.”

NASDAQ OMX partners with Deutsche Bank and Imarex FS to introduce FX trading and clearing solution
Stockholm, January 16, 2013 — NASDAQ OMX Nordic, part of NASDAQ OMX Group (NASDAQ:NDAQ), announces a partnership with Deutsche Bank and Imarex FS (Financial Services) to offer market participants access to an integrated trading and clearing service for FX products.This allows clients of NASDAQ OMX’s Norwegian clearing house, NOS, to trade FX products through Deutsche Bank’s leading FX trading platform. Thus they will get direct access to liquidity from the world’s leading FX bank, whilst ensuring that clearing and counterparty risk management is carried out in a best practice environment.

Deutsche Bank is the world’s largest FX bank, capturing 14.64% of overall market share (Euromoney 2012 survey), which operates the leading FX electronic trading platform Autobahn. Imarex FS will handle the customer onboarding process.
“The combination of world class FX execution and clearing capabilities is a compelling offering for investors looking to transact FX on a standalone basis or as part of a portfolio of assets,” said Greg Edwards, Head of Electronic FX Corporate Sales Europe at Deutsche Bank. “With this initiative investors benefit from best in class technology and liquidity combined with enhanced reporting and improved risk control. The partnership delivers significantly improved workflow capabilities, and we look forward to further developing the service.”

“Our clients are looking for superior trade execution, risk management, capital efficiency and trade processing,” said Mikael Estvall, Vice President of Fixed Income products at NASDAQ OMX Stockholm. “Our new FX clearing service is a response to that. It’s an innovative solution at a time when OTC traded derivatives are gravitating towards clearing in order to reduce counterparty risk. It provides our customers with competitive FX rates from the largest FX bank in the world, along with reduced counterparty risk via our NOS clearing service.”

“This partnership brings access to the deep liquidity on the Autobahn trading platform which delivers significant benefits to our clients,” said Anders Borg, Managing Director at Imarex FS. “We believe the offering has the potential to deliver significant savings for corporates, institutions and active currency traders through improved currency prices, whilst eliminating credit risk between the bank and client. The result is a complete solution for FX trading that meets the needs of our sophisticated client base.”

The NOS clearing service is to be integrated into NASDAQ OMX Stockholm’s FX clearing service during 2013.

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