The latest phase of programme supporting the automated issuance, management, trading, clearing and settlement of warehouse receipts for soft commodities
London, Lilongwe 19 May 2016. GMEX Technologies (GMEX TECH), part of the GMEX Group and Avenir Technology Limited (Avenir), the UK based post-trade software firm, today announced phase 2 of the project to implement the warehouse receipt system, AvenirWRS, is live at the Agricultural Commodity Exchange for Africa (ACE) in Malawi.
This latest project phase delivers warehouse receipts creation, management and financing. Associated activities include enhanced contact management and accounting functions for warehouse charges and fees. The solution also extends SMS messaging, documentation and auditing functionality.
The implementation follows the successful launch of the contact database functionality, in February in phase 1, allowing operators and agents (e.g. farmer cooperative societies, brokers etc.) to set-up and maintain a database of farmers who are interested in taking part in the warehouse receipt arrangements immediately or in the future. Phase 3 of the project will introduce electronic trading of warehouse receipts during Q3 2016.
The new system integrates the functionality of the existing ACE systems and processes into a high performance, agile, scalable technology platform. In addition to the traditional warehouse receipt systems which tend to focus on the depository function, ACE has evolved systems and processes which are custom-designed for frontier markets integrating depository services with pricing, financing, trading and information vending solutions.
Kristian Schach Møller, CEO of ACE commented, “ACE very pleased to be continuing to extend our services catering to the needs of small farmers enabling the growth and development in rural economies.” He added, “Our partnership with GMEX and Avenir is bringing world class technology to deliver an effective warehouse receipt solution providing proven, tangible benefits for poor farmers as they can better maximise their returns for the benefit of their families and the wider community.”
Hirander Misra, CEO and Co-Founder of GMEX Group added, “We are pleased that our strategy to offer our exchange business expertise and technology through the creation of sustainable local partnerships in Emerging Markets such as Malawi is proving to be successful.” He added, “We expect that ACE will become a template for other exchanges trading physical soft commodities across Africa and globally requiring an efficient warehouse receipts system and delivery mechanism.”
Stuart Turner, CEO and Co-Founder of Avenir commented, “We are delighted the project to provide a cost effective, easily accessible automated soft commodity exchange solution for Malawi has been successful. This part of the project has run smoothly and we are looking forward to phase 3 and continuing our relationship with ACE and GMEX.”
The Realization Group
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About GMEX Technologies Limited
GMEX Technologies Limited (GMEX TECH) is a wholly-owned subsidiary of GMEX Group. GMEX TECH is provider of multi-asset exchange and post trade technology, which includes an FCA vetted high performance exchange trading system, through to a leading edge matching engine, market surveillance system, several front end trading platform options as well as clearing house and depository systems.
About GMEX Group
GMEX Group (UK) Limited (GMEX Group) is a group of companies that offer sustainable and innovative solutions for the new era of global financial markets, encompassing:
- Operation of an exchange for the trading of a Constant Maturity Future for Interest Rate Swaps
- Development of related new tradable market and product indices
- Creation and operation of low cost electronic exchanges in equities, debt, FX, derivatives and commodities in developing and, in a targeted way, developed markets
- Interconnectivity of exchanges to each other creating a global network of liquidity
- Business development to enhance liquidity in partner exchange products
- Consultancy on exchange strategy, product development, clearing and regulation
- Provision of exchange, clearing house and depository platform technology
GMEX Group stakeholders include Deutsche Börse AG, Société Générale Corporate & Investment Banking and Forum Trading Solutions Limited through its investment vehicle.
For more information, visit www.gmex-group.com or follow us on Twitter @GMEX_Group
About Agricultural Commodity Exchange for Africa (ACE)
The Agricultural Commodity Exchange for Africa (ACE) is a spot and forward market commodity exchange, meaning that all contracts require a physical delivery of commodities either immediately, or at a specified future date.
Contracts on ACE clearly specify commodity specifications. ACE has adopted widely used regional commodity quality standards as ACE standards for this purpose, to create a general reference point for trade in agricultural commodities. ACE is promoting the harmonisation of standards, but will trade using any specified quality specifications, until the market moves towards more harmonised quality standards. On ACE it is up to the buyer and seller to agree which quality specification to use and to specify these in the contract.
ACE enables counterparties to manage a wide range of risk-mitigated trading and financing structures – bid/offer, forward contracts, auctions and reverse auctions – end-to-end through the entire transaction cycle. Functionalities thereby support origination, matching, contracting, collateral registration, collateral management, cash-flow management, settlements and liquidations.
ACE is promoting three main concepts of trade integrated into the ACE trading system.
Warehouse Receipt System
Depositors can deposit commodity in an ACE certified storage facility and receive a warehouse receipt. The receipt is the essential document in the system. The storage operator will guarantee that the quantity and quality stated on the receipt, is what the holder of that receipt will be able to collect at any given time. This guarantee enables the banks to finance the warehouse receipt with the underlying commodity as collateral; and gives the buyer of the warehouse receipt confidence that the commodity is in safe storage and that delivery is without the traditional risks.
A warehouse receipt is traded on ACE; a buyer deposits the contract value into the ACE Settlement Account and ACE will settle all outstanding liens, such as storage fees, finance and finance costs, before transferring the balance to the seller.
ACE Bid Volume Only (BVO) and Offer Volume Only (OVO) systems
The BVO system works like a real time reversed auction. It is designed for buyers of large quantities to retrieve a price discovery from the market before contracting suppliers. A buyer request ACE to place a BVO to buy with a certain quantity including all terms and conditions, but with no specified price. ACE notifies all registered suppliers and invites them to offer prices at a real time trade session. At the end of the session the buyer can select competitive offers and ACE will generate the contracts and settle the trade.
The OVO is the exactly opposite where a seller request ACE to place an OVO to sell with a certain quantity including all terms and conditions, but with no specified price. ACE notifies all registered buyers and invites them to bid at a real time trade session. At the end of the session the seller can select competitive bids to buy and ACE will generate the contracts and settle the trade.
Bid and Offer Matching
Anyone who wants to sell or buy agricultural commodities can contact ACE or an ACE certified broker to place an offer to sell or a bid to buy. All bids and offers can be seen on the live market information screen. Select a bid or an offer and all details and terms and conditions will be stated. All bids and offers are live and active and can be accepted online by ACE or an ACE certified broker to generate a binding contract.
ACE is generating real time market information from these bids/offers and contracts generated. This information is public and available to all. ACE disseminates the information through this website, daily trade reports on email and the ESOKO mobile market information system. Please contact ACE if you are interested in receiving this information.
For more information, visit www.aceafrica.org
About Avenir Technology Limited
Avenir Technology is a new participant in Financial Market software, created by a group of industry professionals disillusioned with the high cost and inflexibility of legacy systems. Avenir has developed a suite of innovative and cost effective systems for post-trade processing for exchanges, clearing houses, central securities depositories (CSDs) and share registrars.
Using only open source components and with a focus on usability, Avenir software is markedly different to existing offerings. It is delivered via the internet to computers, tablets and smartphones. It is easy to use with minimum training but contains all the features needed to effectively and safely operate the relevant infrastructure.
Avenir’s first product was a share registry platform that is currently in production in the UK and New Zealand. Other products include AvenirSettle, a solution for security settlement and AvenirClear, a multi-asset central counterparty clearing system, the latter of which is going to used in the new derivatives market in Vietnam.
Future development focus is on more solutions for commodity markets, where its easy deployment should make it appealing for the many new markets that will be developing over the next few years.
For more information, visit www.avenir-technology.com