Straits Financial LLC (Straits) and the American Financial Exchange (AFX) have jointly launched a program to offer clients the opportunity to both trade the AMERIBOR® futures contract and receive interest based on the daily AMERIBOR® rate.
The LIBOR had always been the dominant global benchmark for determining interest payments that underpins trillions in financial instruments, setting borrowing costs for corporations and homebuyers around the world. With the Bank of England looking to phase out the LIBOR benchmarking in 2021, it would soon lose its preeminence. Consequently, there is an immediate need to develop alternative benchmarks. The introduction of an alternative interest rate benchmark, the AMERIBOR®, can bridge the uncertainty tagged to the LIBOR.
AMERIBOR® is a new interest rate benchmark created by the American Financial Exchange (AFX) that reflects the actual unsecured borrowing costs of over 1,200 American banks and financial institutions. It is a transaction-based interest rate benchmark, calculated as the weighted average daily volume in the AFX overnight unsecured loan market. AMERIBOR meets the Principles for Financial Benchmarks issued by International Organization of Securities Commissions (IOSCO) and has completed an independent third-party audit of AMERIBOR's conformance with IOSCO benchmark standards.
Straits Financial LLC, in conjunction with AFX, has initiated an international program to allow Asian clients to earn interest in their futures account based on the AMERIBOR® daily rate. The program will be initiated for Asia through the Straits Indonesian regulated branch office.
Straits and AFX are excited to assist global participants in earning returns based on the AMERIBOR® rate and believe this to be an excellent program for the global institutional community.
About American Financial Exchange
The American Financial Exchange is an electronic marketplace created by Chicago-based futures industry innovator Dr. Richard Sandor where U.S. banks and financial institutions can lend and borrow short-term funds. It allows banks and financial institutions to trade directly with each other in a transparent and regulated platform. The exchange was launched on Dec. 11, 2015. For more information, visit www.ameribor.net.
About Straits Financial Group
Headquartered in Singapore, Straits Financial Group offers a broad spectrum of derivatives and OTC products, including trade facilitation for physical commodities. Established offices include Chicago, New Jersey, New York, Shanghai, and Jakarta. Straits Financial LLC is a full clearing member of the Chicago Mercantile Exchange (CME), Chicago Board of Trade (CBOT), New York Mercantile Exchange (NYMEX), the Commodity Exchange (COMEX), CME ClearPort, Dubai Mercantile Exchange (DME) and CBOE Futures Exchange (CFE) and offers clearing access to all major global commodity exchanges. For more information, visit www.straitsfinancial.com.
DISCLAIMER: This article is issued for information purposes only. This article is not intended, and should not under any circumstances be construed as an offer or solicitation to buy or sell, nor as financial advice or a recommendation in relation to any capital market product. All the information contained herein is based on publicly available information and has been obtained from sources that Straits Financial believes to be reliable and correct at the time of publishing. Straits Financial will not be liable for any loss or damage of any kind suffered due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information. Trading commodity futures and options products presents a high degree of risk, and may not be suitable for all investors. Past performance of futures contracts, derivatives contracts, and commodities is not indicative of future performance. The information in this article is subject to change without notice.
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Original Source: Straits Financial LLC and the American Financial Exchange (AFX) Join Forces to Provide Futures Clearing and Interest Earning Facility for Institutional Clients
