Two of the City of London’s oldest financial institutions are at loggerheads over the future of the $155bn global freight derivatives market.
The London Metal Exchange has held exploratory discussions with participants in the freight derivatives market in an attempt to attract their business on to the LME’s trading platform. It has claimed that it is the “natural venue” for forward freight agreements (FFAs) – contracts that allow parties to hedge the risks associated with shipping freight – after holding “exploratory discussions” with leading freight derivatives traders as part of a plan to attract their business on to the LME’s trading platform.
