Cetip Signs Agreement with S&P Global Platts to Expand its Derivative Index Portfolio
Cteip.com- BRAZIL – Cetip has entered an agreement with S&P Global Platts, the leading independent provider of information and benchmark prices for the global energy and commodity markets, making it possible for Brazil’s financial institutions to offer over-the-counter (OTC) commodities derivatives contracts that allow their customers to hedge against future price fluctuations. Historically, the only hedging tools tended to be like-kind, but not necessarily matching commodities indexes and non-domestic contracts.
The new indexes include Brent crude oil, oil distillates including jet fuel, fuel oil and kerosene, iron ore and aluminum. They will help a range of companies, including producers, refiners, exporters, importers, make better informed risk management decisions.
“With this agreement, financial institutions are now able to register derivatives linked to commodity prices published by S&P Global Platts. Additionally, this agreement may lead to reduce hedging costs, since the end user does not need to access the foreign market directly,” explains Fabio Zenaro, Superintendent of Products at Cetip.
One financial institution that sees the benefit of this agreement is Citi Brazil. Luis Kondic, the company’s Treasury products manager, says: “In a demonstration of innovation and efficiency capacity, the partnership between Cetip and S&P Global Platts allows Citi to expand its offering of commodities derivatives, add new indexes, and serve its customers with local solutions to manage the exposure to price fluctuations in foreign markets.”
Marc Karstaedt, vice president of channel and strategic alliances at S&P Global Platts, says: “Markets are increasingly volatile, interrelated and complex and we’re pleased to be joining forces with Cetip to facilitate important risk management opportunities in Brazil’s energy and commodity markets through our independent benchmark price references.”
Cetip registers all types of OTC derivatives practiced in the country. In Brazil, the main underlying assets (indices) of these agreements are currencies, followed by interest rates. The derivatives contracts made possible by the clearinghouse can be customized according to the needs of each company, and the index portfolio expansion allows this work to be carried out with even more precision.
Cetip is Latin America’s largest depositary of private fixed-income securities, and the largest private assets clearinghouse in the country and leader in electronic delivery of information necessary for the registration of contracts and liens by departments of transportation. For more information, visit www.cetip.com.br
Seven startups will focus on enhancing efficiency and productivity.
Essentia analyses data to create behavorial “nudges” for fund managers' investment decisions.
Snowflake’s Financial Services Data Cloud helps data flow more seamlessly across industry transactions.
Artificial intelligence and machine learning, powered by cloud, are moving into mainstream use.
Exchange group aims to support new markets for digital assets, cryptocurrencies and NFTs.