OnExchange, a US-based provider of derivatives trading and clearing technology for B2B marketplaces, has been designated a fully-regulated futures exchange and clearing house by the Commodity Futures Trading Commission (CFTC).
With its regulatory approval, onExchange can trade futures through its onExchange Board of Trade subsidiary and clear futures and OTC derivatives through its onExchange Clearing Corp. subsidiary.
The new market is the first exchange approved under the US Commodity Futures Modernisation Act of 2000, the first fundamental overhaul to the nation's derivatives laws in more than 25 years. The Act revises existing commodity futures and OTC derivatives regulation and permits new markets in single stock futures.
"OnExchange was created to enable new market structures, including security futures and OTC derivatives clearing houses permitted under the Commodity Futures Modernisation Act," says Philip McBride Johnson, an onExchange advisor and former CFTC chairman.
The new exchange has been created to offer B2B markets integrated access to regulated futures as well as spot, forwards and swaps instruments on a single, straight-through-processing platform.
In addition to its regulated activities, onExchange licenses its trading and clearing technology to operators of online commercial and dealer markets and existing OTC, futures, and securities exchanges. In December, onExchange licensed its RealTime Clearing technology to EnergyClear, the first energy-industry-sponsored OTC derivatives clearinghouse.