<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=0tH6DU_0wPDPXBz00" alt="https://img.particlenews.com/image.php?url=0tH6DU_0wPDPXBz00" width="1000" height="700" ></figure>Earlier in the summer, Abaxx Technologies went live with the Clara clearing platform from independent clearing systems vendor Baymarkets, to power its recently established Abaxx Commodity Futures Exchange and Clearinghouse in Singapore. Abaxx Clearing will use Clara to manage its initial lineup of five centrally-cleared, physically-deliverable futures contracts in liquefied natural gas (LNG) and carbon. Future expansions include contracts for battery metals to support price discovery and risk management in transition-critical commodities.In this Q&amp;A with TradingTech Insight, Peter Fredriksson, Chairman of Baymarkets, discusses the evolution of clearing technology and the company’s innovative approach to meeting the needs of modern clearinghouses. Fredriksson shares insights into the firm’s work with Abaxx, the advantages of microservices and cloud deployments, and the shift from SPAN to VaR risk models. He also discusses trends shaping the clearing landscape, including the move toward hybrid cloud environments and the push for T+1 settlement. Finally, Fredriksson offers practical advice for firms looking to adopt advanced clearing solutions.TTI: Thank you for taking the time to speak with us, Peter. I’d like to learn more about Baymarkets’ work with Abaxx – especially in the cloud – and how you view the future landscape of clearing technology. Could you start by sharing some background on your work with Abaxx and how you see Baymarkets’ strategy evolving in the clearing space?PF: Certainly. Abaxx were initially working with another exchange technology provider but were unsatisfied with the partnership. Rather than going through a formal RFP, they surveyed the market, and fortunately, they liked what we offered and chose Clara in Q1 of 2022. We began with a design study, which was a bit challenging as it happened remotely during COVID, but we made it work and the outcome was above expectations. One key challenge was implementing SPAN as a risk model for them, as we’re predominantly focused on VaR-based models. Additionally, Abaxx’s focus on commodities, particularly LNG with physical delivery, introduced some unique requirements. For instance, every LNG ship has a fixed number of contracts, so if a trade deviates from that, the difference needs to be settled financially and if the contract has a smaller quantity than the size of the ship the position will be automatically closed and there will be a penalty fee. It was complex, but we reached an agreement and moved forward from there.TTI: What do you think made Abaxx choose Baymarkets over other providers? Clearly, they weren’t satisfied with their existing setup, but what aspects of your offering appealed to them?PF: A few things, really. First, they liked the robustness of our system. It’s a comprehensive clearing platform with an intuitive GUI, which minimises the operational manpower needed. Our expertise was also a significant factor—our team has deep backgrounds in clearing across development, operations, and risk. This experience was invaluable, especially with Abaxx relying heavily on us for risk and operational insights.TTI: Did the architecture of your system play a role in their decision? I understand you deploy through microservices and can support Docker containers, making it possible to deliver the system on-premise, in the cloud, or in hybrid environments. Was that flexibility a factor?PF: Yes, absolutely. We had already deployed our system in the cloud for our development and testing, so we had the groundwork set. Working with Abaxx, we adapted it to run on AWS as per their requirements. The ability to deploy flexibly in different environments was a crucial part of the appeal.TTI: So for Abaxx, Baymarkets is responsible for the code, support, and functionality of the system, while AWS handles the infrastructure?PF: Exactly. At first, we encountered some challenges due to the time zone differences—Abaxx is based in Singapore, with its tech team in the US, which complicated coordination. However, once the tech team in Singapore was strengthened, the process smoothed out considerably.TTI: Given Baymarkets’ multi-asset, multi-currency capabilities across commodities, financial markets, digital assets, spot, and derivatives, how do you see the clearing landscape evolving? What kind of requests are you seeing from clients?PF: We’re definitely seeing an increase in demand, and the landscape is diverse. Some clients need on-premise deployments due to regulatory requirements, while others are pursuing hybrid environments—one client, in particular, has a high-volume system running trading on-premise and clearing in the cloud via AWS. This hybrid setup works well since clearing, unlike trading, is less latency-sensitive. We just need to receive trades, which can be done from practically anywhere.TTI: How is the shift towards T+1 clearing, as seen in the US and likely coming to the UK and Europe, impacting Baymarkets? Are your systems prepared for that change?PF: It does have a slight impact, primarily operational. There’s less time to correct errors, but it’s not really a technology issue. We provide the automation necessary to meet these faster timelines within clients’ workflows.TTI: What about trends in risk calculations from a clearing perspective?PF: There’s definitely a shift away from SPAN towards VaR models, as regulators tend to prefer VaR. However, some futures exchanges still use SPAN, which is why Abaxx chose it; their members and clients are accustomed to it. One aspect that may set us apart is our integrated approach to risk. We don’t just look at portfolio risk but also consider collateral. For example, if products are used as collateral, we incorporate them into the risk calculation. It’s essential to have a holistic view.TTI: Any final thoughts on the future of clearing technology?PF: Yes, I’d say this: RFPs for clearing systems often require extensive lists of questions, yet clients could benefit from starting differently. Instead of listing requirements based on an existing system, they should engage with vendors, view demos, and understand where technology and best practice stands today. This approach, with design studies and direct discussions, often yields better outcomes than rigid RFP evaluations. Checking out the technology, the team, and client references can offer a more comprehensive perspective for firms seeking new clearing solutions.TTI: Great advice, Peter. Thanks very much for your insights.</div></body>

Mountain View, CA

NewsBreak

Clearing the Way: Baymarkets on the Evolution of Clearing Systems

Earlier in the summer, Abaxx Technologies went live with the Clara clearing platform from independent clearing systems vendor Baymarkets, to power its recently established Abaxx Commodity Futures Exchange and Clearinghouse in Singapore. Abaxx Clearing will use Clara to manage its initial lineup of five centrally-cleared, physically-deliverable futures contracts in liquefied natural gas (LNG) and carbon. Future expansions include contracts for battery metals to support price discovery and risk management in transition-critical commodities.