SINGAPORE (Sept 19): Straits Financial Group, the financial services arm of CWT Limited, has obtained the regulatory licence to operate a physical commodity exchange it brands as Asia Commodity Marketplace (ACM) along with its dedicated clearing house in Indonesia.

In a Tuesday announcement, CWT says ACM intends to offer an organised market place for local producers and international market participants to “transact directly and negotiate anonymously over an electronic platform”. The arrangement will also allow market participants to access a larger pool of counterparties to trade physical commodities through the clearing house.

The group intends for cargoes to be delivered through secured bonded warehousing facilities, both inland and along major seaports in Indonesia.

“With this licence, ACM has the potential to revolutionise traditional practices of physical trading in Indonesia, by connecting buyers directly to the production source; and more importantly, for the transaction to be backed by a central clearing counterparty for risk mitigation,” says Arwadi Setiabudi, ACM’s appointed CEO.

He shares that the exchange intends to roll out a suite of agricultural products next year, which include cocoa, coffee, rubber, soybean and sugar.

CWT Limited’s group CEO, Loi Pok Yen, says ACM is a “natural business extension” for Straits Financial, which is due to tap on the group’s commodity logistics competency and expertise in operating physical delivery and warehousing for various commodity exchanges to create further synergies for CWT as a whole.

Shares of CWT closed 0.77% higher at S$1.97 on Monday.