Australia approves new derivatives market, clearance licences

04/10/2013

CANBERRA, April 10 (Reuters) - Australia's Financial Services Minister Bill Shorten approved licences for a new Australian derivatives market and for clearance and settlements on Wednesday and said he expected the first trades to take place in about six months.

Shorten granted the market licence to Financial and Energy Exchange Global Pty Ltd (FEX), allowing it to set up a market for energy, commodity and environmental derivatives.

He also approved British clearinghouse LCH.Clearnet Ltd, controlled by the London Stock exchange, to clear and settle contracts on the new FEX market, setting up new clearance competition for the ASX.

"The decision will provide a trading venue to trade specialised derivative products and provide a greater service offering to the market," Shorten said in a speech in Beijing and televised to a Sydney financial markets conference. He gave no figures on how large the market might become.

He said the licence for LCH.Clearnet would be the first overseas clearance and settlement licence in the Australian market and would be the first non-ASX clearing licence for a significant market.

He said FEX and LCH.Clearnet will work with Australia's market regulators and the Reserve Bank of Australia over the next six months to ensure appropriate controls are in place before the market starts.



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