Brown Brothers Harriman & Co. to Provide Banking and Margin Settlement Services to onExchange.Business/Technology Editors WALTHAM, Mass.--(BUSINESS WIRE)--Nov. 16, 2000 Leading Commodity Futures Banker Appointed as Custodian for Innovative Futures Clearinghouse onExchange, Inc., an industry leader in providing commodity and financial market technology platforms for electronic marketplaces, announced today that Brown Brothers Harriman & Co. (BBH BBH Brown Brothers Harriman (investment bank) BBH Bartle, Bogle, Hegarty (advertising agency) BBH Bouncing Busy Hour BBH Blueback Herring (FAO fish species code) ), a leading custodian and banker to the commodity futures industry, will provide custody and settlement services to the onExchange Clearing Corporation (ONXCC) pending approval by the Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC), the federal regulatory agency for futures trading, was established by the Commodity Futures Trading Commission Act of 1974 (88 Stat. 1389; 7 U.S.C.A. 4a), approved October 23, 1974. . ONXCC, an onExchange subsidiary, is the clearinghouse for the company's futures exchange Futures Exchange Traditionally, a term referring to a central marketplace where futures contracts and options on futures contracts are traded. More recently, with the growth in electronic trading, it is also used to describe the activity of futures trading itself. , the onExchange Board of Trade. "We are pleased that BBH, a leading margin settlement banking institution in the commodity futures markets, will serve as the custodian and margin settlement bank for the onExchange Clearing Corporation," said onExchange CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Richard Jaycobs. "BBH's margin asset management capabilities will be an important component of onExchange's safeguards." BBH is an approved margin settlement bank for all major U.S. commodity futures exchanges This is a list of futures exchanges. Those stock exchanges that also offer trading in futures contracts besides trading in securities are listed both here and the list of stock exchanges. . In addition, it provides banking, investment management and corporate finance services to futures brokerage firms that clear the exchanges. Under the terms of the agreement, ONXCC will establish custody accounts at BBH to hold margin assets posted by market participants to back their trading. "Electronic markets will enhance the already highly competitive U.S. futures markets," said BBH Senior Vice President Robert C. Push. "onExchange's robust trading and clearing infrastructure and technologies are an example of U.S. commodity futures market innovation and a compelling futures solution for eMarketplaces." The onExchange Board of Trade provides direct access to commercial and institutional market participants who back their trading activity by posting margin assets directly in onExchange Clearing Corp.'s custody account at BBH. ONXCC's system monitors margin requirements, trading activity and margin assets in real time and interfaces with BBH's BIDS(SM) custody system. This link provides an integrated, straight-through processing straight-through processing The direct exchange of cash and securities. Straight-through processing is a major objective for cross-border transactions that are generally much more costly to settle compared to domestic transactions. solution for trading and clearing futures that will significantly enhance operational efficiency. In addition to margin and position management, ONXCC provides financial integrity through an innovative clearing account structure in which the clearinghouse establishes one or more sub-custody accounts for each market participant. In this account structure, each sub-custody account holds margin assets for a single market participant only, which provides a high level of market participant protection. About onExchange onExchange operates the onExchange Board of Trade and the onExchange Clearing Corporation, which, pending CFTC CFTC See: Commodity Futures Trading Commission CFTC See Commodity Futures Trading Commission (CFTC). designation expected in January 2001, will be a regulated futures exchange and clearinghouse respectively. CFTC designation will permit onExchange to add regulated products to its derivatives trading and clearing solutions. onExchange technology enables unregulated electronic exchanges to extend their online cash market offerings to include regulated and over-the-counter derivatives instruments that drive liquidity through their flexible risk management and trading utility. onExchange provides a comprehensive integrated clearing and settlement function, real-time risk management and flexible product authoring. The Company also provides modular, Web-based trading, clearing and risk management technology solutions to existing commodity and financial markets. onExchange is privately held and headquartered in Waltham, Mass. The Company's Web site address is www.onexchange.com. About BBH Founded in 1818, BBH is licensed as a private bank with banking offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Boston and Philadelphia. BBH also maintains offices in Chicago, Los Angeles, Dallas, Charlotte, Naples, Palm Beach, London, Luxembourg, Dublin, Zurich, Tokyo, Hong Kong and Grand Cayman. BBH has five principal businesses. These include global custody, investment management, commercial banking, foreign exchange and corporate finance. Global custody is BBH's largest business with $900 billion of securities in safekeeping Safekeeping The storage of assets or other items of value in a protected area. Notes: Individuals may use self-directed methods of safekeeping or the services of a bank or brokerage firm. held primarily for institutional clients in approximately 90 countries. Investment management is BBH's second largest business with approximately $37 billion of assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. . Servicing the futures industry is considered a core BBH business that involves four of its principal activities -- custody, investment management, commercial banking and corporate finance. BBH is a margin settlement bank for all the major US futures clearinghouses and services over 40 CFTC registered futures commission merchants Futures commission merchant (FCM) A firm or person engaged in soliciting or accepting and handling orders for the purchase or sale of futures contracts, subject to the rules of a futures exchange and, who, in connection with such solicitation or acceptance of orders, accepts any . As a margin settlement bank, BBH acts as a financial intermediary Financial Intermediary An institution that acts as the middleman between investors and firms raising funds. Often referred to as financial institutions. Notes: This can include chartered banks, insurance companies, investment dealers, mutual funds, and pension funds. for the pledging of securities as margin and the payment of margin to futures clearinghouses. BBH is an investment advisor Investment Advisor 1. A person making investment recommendations in return for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and for the margin assets held by futures clearinghouses and clearing members and also serves as a financial advisor in the evaluation of acquisitions and strategic partnerships. The Bank's Web site address is www.bbh.com. OnExchange, digitalDerivatives, onClear, and RealTime Clearing are service marks of onExchange, Inc. BIDS is a service mark of Brown Brothers Harriman & Co. |
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