Agora-X today announced that The Nasdaq OMX Group, (Nasdaq:NDAQ) has completed its equity investment following launch of the new Agora-X electronic communications network for institutional trading in over-the-counter (OTC) commodity contracts.
The transaction gives NASDAQ OMX a 20 percent equity interest in Agora-X.
"We are delighted with the deepening relationship between Agora-X and NASDAQ OMX, the global leader in exchanges and technology. We've worked with NASDAQ OMX to create the technology for a best-in-class electronic marketplace, and now that Agora-X is 'live' we are going to transform the way institutions trade OTC commodities," said Brent M. Weisenborn, Chief Executive Officer. "Trading is all about getting the best price, and the Agora-X platform brings offers and bids together to provide efficient negotiation, improved price visibility, and greater liquidity for OTC market participants."
On December 12, Agora-X launched an electronic communications network (ECN) designed to enable institutional traders to efficiently negotiate OTC transactions in agricultural swaps and swaptions, as well as swaps and options on ethanol. The platform provides a more liquid and transparent marketplace for price discovery and negotiation. Until now, OTC market participants have had to find counterparties and negotiate prices for each trade through time-consuming phone calls, instant messages or e-mails.
In January, Agora-X plans to roll out its exempt commercial market (ECM) to handle financially-settled option "look-alikes" in energy, metals and other non-agricultural commodities. The ECM will allow negotiation, execution and clearing of OTC trades in non-agricultural commodities.
As previously announced, Agora-X has filed a petition with the Commodity Futures Trading Commission (CFTC) seeking an exemption under Section 4(c) for the Agora-X ECN to provide clearing of trades in agricultural swaps and swaptions. Current CFTC rules allow clearing of OTC trades for other types of commodity contracts, but not agricultural swaps and swaptions, unless a marketplace obtains a specific exemption.
In addition, Agora-X has submitted a petition to the Commission to amend CFTC Rule 35 to enable clearing industry-wide of OTC agricultural swaps and swaptions. If Part 35 is amended, the 4(c) exemption would not be necessary.
Provident Group, a New York-based boutique investment bank and alternative asset management firm is the exclusive financial advisor to Agora-X.