Company Circular No:	LCH.Clearnet Ltd Circular No 3237
Service Circular No:	LCH EnClear No 373
Date:	13 December 2012
To:	All LCH.Clearnet EnClear Clearing Members

Launch of new EnClear Freight and Fertilizer contracts

LCH.Clearnet is pleased to announce the launch of three new EnClear contracts:

Urea- New Orleans Fertilizer Options (ONO)
P2A Dry Trip Timecharter Option (P2O)
Tanker Voyage Route - Baltic TC14 (D14)

These contracts will go live on Wednesday 19th December 2012

All Clearing Members already active on the FFA service will automatically have access to the new TC14 contracts and the P2A option contract.
All Clearing Members with access to the fertilizer contracts will automatically have access to the UREA option contract
The LCH.Clearnet registration fees will be :
- ONO: $25 / lot
- P2O: $8 /lot
- D14: $4 /lot
No settlement fees will be charged

Please see below for the contract specifications:

UREA - New Orleans option
Description	Single expiry, premium paid option on the underlying UREA – New Orleans (UNO) Fertilizer Swap contract for the corresponding expiry.
Contract Code	ONO
Lot Size	500st
Currency	US Dollars
Minimum tick	US $0.0001
Option Type	Options are Asian style and will be automatically exercised on the expiry day if they are “in the money”. If an option is “out of the money” it will expire automatically. It is not permitted to exercise the option on any other day or in any other circumstances. No manual exercise is permitted.
Option Premium	The Premium is paid at the time of purchase
Last Trading Day	Last publication day of the relevant index in the contract month ie the last business Thursday of every month Exception – December contracts will expire on the penultimate Thursday, as there is no publication of an index in the week prior to New Year Where the last Thursday of the month is a non-business day, the last trading day will be the first business day preceding.
Expiry	18:00 hours UK time on the last trading day Automatic exercise settings are pre-set to exercise contracts which are one minimum price fluctuation or greater "in-the-money" when compared to the relevant reference price Members are not permitted to override automatic exercise settings or manually enter exercise instructions for this contract The reference price will be a price in US dollars, cents and hundredths of a cent ($0.0001), per day equal to the final settlement price for the underlying UREA – New Orleans (UNO) Fertilizer Swap contract For these purposes “final settlement price” means the final settlement price on the expiry day of the underlying UREA – New Orleans (UNO) Fertilizer Swap contract
Contract series	Front 6 months, 4 quarters
Strike Price	Any whole $ value
Margin	Options will be subject to Initial Margin and Net Liquidation Value variation margin on a daily basis.
Business Days	UK business days

$ per tonne TC14 tanker route
Description	Cash settled $/t freight forward contracts on the following Tanker Voyage Routes: Baltic TC14 (D14) (38,000 mt., U.S.Gulf - Continent)
Lot Size	1,000 mt
Currency	US $/tonne
Minimum tick	US $0.0001 to account for final settlement
Fixed price	The traded price (in $/t) or the previous day’s settlement price, as supplied end of day by the Baltic Exchange
Floating price	In respect of daily settlement, the floating price will be the end of day price (in $/t) as supplied by the Baltic Exchange In respect of final settlement, the floating price will be a price in US$ per mt calculated as the mean of the Baltic Exchange WS rate spot price/100 multiplied by the flat rate for each pricing date in the settlement period
Last trading day	At 18:00 hours UK time on last business day of each month within the contract series Exception – December contracts will expire on the 24th December, or previous business day, where the 24th December is a non working day
Contract series	Traded as months, quarters and calendars, out to 2 whole calendar years (a maximum of 35 months)
Final payment	On the first business day following the expiry day
Business Days	UK business days

P2A dry trip timecharter option contract
Description	Cash settled Premium Paid Option on the following Dry Trip Timecharter Route: P2O (Cont Trip Far East) These contracts, if “in the money” expire into their underlying freight forward contracts with a traded price equal to the Strike Price (see below)
Lot Size	1 day
Currency	US Dollars
Pricing	US $ per day
Minimum tick	US $1 per day
Option Type	Options are European style and will be automatically exercised on the expiry day if they are “in the money”. If an option is “out of the money” it will expire automatically. It is not permitted to exercise the option on any other day or in any other circumstances. No manual exercise is permitted.
Option Premium	The Premium is paid at the time of purchase
Last Trading Day	At 18:00 hours UK time on last business day of each month within the contract series Exception – December contracts will expire on the 24th December, or previous business day, where the 24th December is a non working day
Expiry	18:00 hours UK time on the last trading day Automatic exercise settings are pre-set to exercise contracts which are one minimum price fluctuation or greater "in-the-money" when compared to the relevant reference price Members are not permitted to override automatic exercise settings or manually enter exercise instructions for this contract The reference price will be a price in US dollars, cents and hundredths of a cent ($0.0001), per day equal to the final settlement price for the underlying freight forward contracts For these purposes “final settlement price” means the final settlement price on the expiry day of the underlying freight forward contracts
Contract series	Traded as months, out to 3 whole calendar years (a maximum of 47 months)
Strike Price	Any whole $ value
Business Days	UK business days

Please do not hesitate to contact me if you have any questions, [email protected] or +44 207 426 7460

Isabella Kurek-Smith
Director, Head of Energy and Freight

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Launch of new EnClear Freight and Fertilizer contracts