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Norwegian company launches salmon futures clearing

The World's first cleared futures contracts for fresh salmon is about to be launched by FISH Pool ASA. The announcement, made at the Aquaculture Today 2007 conference in Edinburgh, marks a significant step in the rapidly growing seafood derivatives market.

The service will be officially launched at the European Seafood Exhibition in Brussels this week, where NOS Clearing ASA joins Fish Pool ASAs stand on the Norwegian Pavilion. Speaking at the conference Fish Pool’s Managing Director Mr Soren Martens said that introducing clearing of salmon contracts was a milestone in the development of the salmon market both in Norway and internationally. " Financial seafood contracts can now be traded in the market in the same way that soya beans, coffee, wheat and meats are traded on international exchanges,” he said .

Fish Pool says that clearing gives protection against credit risk to each party in a transaction. Many participants are concerned about credit risk because of the forward nature of financial commodity contracts. and this a powerful argument for clearing because each party can be guaranteed settlements from NOS Clearing ASA.

”The great thing with clearing is that every participant can be anonymous when trading because there is no credit risk. This means they can trade with every other participant in the market place without concerns for credit, which helps to boost liquidity. Credit risk is not an issue when you are trading cleared contracts,” explains Mr Erik Flingtorp from NOS Clearing.

NOS Clearing will offer a tailored market solution where clients can choose from direct membership at NOS or to trade indirectly via existing clearing members.

”We are building a solid seafood exchange for international participants where creating liquidity is alpha-omega for everyone. Clearing services from NOS Clearing is an important corner stone for us in increasing trading volumes at Fish Pool,” said Soren Martens. The company will also continue the offer bilateral trading at Fish Pool in NOK and Euro with direct settlement between the trading parties. "This is important as it will give an easy introduction to financial trading. By showing flexibility and offering two alternatives, we will satisfy the needs of all companies in the salmon business,” said Mr Martens.