London set to embrace new OTC Energy MTF

Griffin Markets Group, a new energy Trading Platform provider, has announced that it will introduce a Multilateral Trading Facility for the European over-the-counter energy markets.

The Griffin MTF will launch in the third quarter of 2012, with OTC gas, electricity and coal contracts and is subject to regulatory approval by the UK's Financial Service Authority.

The Griffin MTF will use technology provided by Intercontinental Exchange (ICE) and will be distributed via WebICE, the front-end to ICE's trading platform.

From pre-trade counterparty credit management to post-trade processing and settlement, the Griffin MTF will offer an electronic solution intended to increase value and reduce cost for market participants, whilst traditional voice broking will remain available for less liquid markets such as gas, power, coal and emissions options.

"The combination of ICE's leading technology and Griffin's market experience and expertise will provide OTC gas and power participants in Europe with an innovative and low cost way of executing and processing their business via a more flexible and secure electronic trading venue. Customers will also benefit from the option to configure the Griffin MTF with existing middle and back office systems," said Andrew Stephens, Co-Founder and Chief Executive Officer, Griffin Markets Group.

"Since electronic trading was first introduced to the European energy markets, technology and service provision has not kept pace with industry developments, in particular the increase in product complexity and new counterparties.

As regulatory requirements are deepening and the demand for clearing increases, now is the time to introduce more choice and a new Execution model for these markets," added Stephens.

LMAX a London-based MTF provides direct market access to FX, indices and commodities

Traditional FX brokers have been diversifying their instrument list to include metals, energy and soft commodities as more and more traders look for opportunities in volatile commodity markets.