The Baltic Exchange Escrow Service continues to gain traction, with new transactions completed in the fourth quarter of 2019 and the first three months of 2020.
The Baltic Exchange, owned by the Singapore Exchange, follows a robust due diligence process and complies with the Monetary Authority of Singapore requirements without compromising on flexibility and service speed to ensure the transactions are handled seamlessly.
This is reinforced by the strict internal control of fund movements from the dedicated escrow account held with AA-rated Singapore banks Overseas-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB).
The escrow service, operated from Singapore, facilitates both shipping and non-shipping transactions around the world.
Escrow services give certainty to all sides in a transaction that payments will be made on completion as they are held by a trusted third party.
In LNG, the London-based Exchange collects data from shipping brokers to provide assessment of three routes on the CME Group trading platform.
These form the basis for a suite of assessments for gas shipping and freight contracts, the first LNG derivative swap took place in July 2019, with cleared trades following since then as company built open-interest positions.
The LNG swaps based on shipments from Australia’s Gladstone port in Queensland to Tokyo, from the US Sabine Pass LNG plant in Louisiana, owned by Cheniere Energy, to the UK. A third freight contract is from Sabine Pass to Tokyo.
So far the Baltic Exchange’s transactions supported by escrow have included asset sales and disputes. However, the service is available for any transaction requiring an escrow agent.
The Baltic Exchange is an independent organisation whose international membership is mainly made up of shipowners, shipbrokers and charterers.
It is the provider of trusted benchmarks and settlement data in the shipping industry. Its escrow service builds on this independence and trust.
Users of the service are assured of the highest levels of confidentiality, professionalism and security.
“The Baltic Exchange acted as escrow agent in the context of a recent sale and purchase transaction providing a professional, swift and efficient support at each stage of the process,” said customer Federico Grimaldi, Sale &Purchase Manager at shipping company Vroon B.V.
“A customer-oriented approach, professionalism and high responsiveness of the Escrow team allowed for a seamless transaction,” added Grimaldi.
Dmitry Pismenny, who heads up the escrow service, said that the Exchange was very pleased to see growing interest in the escrow service.
“Our flexibility and efficiency in supporting different types of transactions has earned plaudits from our clients.,” added Pismenny.