THE BALTIC EXCHANGE. Manual for Baltic Demolition Assessments

Transcription

1 THE BALTIC EXCHANGE Manual for Baltic Demolition Assessments BDA May 2011

2 2 Manual for the Baltic Demolition Assessments (BDA) This manual consolidates the experience of the Baltic in producing freight indices and route assessments and is intended to assist Ship Demolition Panellists reporting on BDA. This manual will be used to assist in ensuring common practice amongst Ship Demolition Panellists and in training new Ship Demolition Panellists; in guiding industry users (to whom it will be available); and in dealing with special circumstances as and when they arise in the future (by the issue of updates). It is also intended to enhance quality assurance of the Baltic's market information products. 1 BDA Rules and Regulations 1.1 Ship Demolition Panellists Obligations The core obligation of Ship Demolition Panellists is to assess and report a professional judgement of the prevailing open market level, at their time of reporting on each BDA publication day (hereinafter referred to as a Reporting Day), for descriptions as defined by the Baltic Exchange on which they are judged to have competence. 1.2 The Appointment of Ship Demolition Panellists The Baltic Exchange appoints BDA panel reporting companies in accordance with the following criteria: A core business of Ship Demolition Panellists should be Demolition broking. Ship Demolition Panellists may not act as principals. They may merely act as intermediaries, bringing together buyers and sellers in the market; trading or commodity houses, ship owners or operators and finance houses, for example will not be considered appropriate Ship Demolition Panellists. Ship Demolition Panellists must be members of the Baltic Exchange. They must be recognised as competent, professional firms, fully compliant with all regulations

3 3 pertaining to Sale & Purchase as required by their country of residence, and actively engaged in the market on which they report, with adequate personnel to perform the role of panellist; Ship Demolition Panellists must agree to be bound by a standard letter of appointment. 2 The Underlying Market The reporting Ship Demolition Panellists must submit their assessments electronically to a secure site provided by the Baltic weekly on Monday or the nearest working day by 1500 London time. The individual Forward Panellist s assessments will be confidential and will only be made available to the Baltic Exchange staff. The BDA will be calculated as the average of the assessments received from the Ship Demolition Panellists. The Baltic Exchange reserves the right to verify Ship Demolition Panellists assessments to guard against an unconscious error and ensure accuracy to the current market conditions. The BDA will be published at hrs, on Mondays or the nearest working day. It will be displayed on balticexchange.com and available to Ship Demolition Panellists under the normal terms of distribution. If a minimum of four assessments is not achieved then a disclaimer to this effect will be issued on the report for BDA for that day. The following disclaimer will form part of all panellist s marketing and contractual documentation: Whilst care has been taken in the production of the BDA all information (which includes all assessments and/or any additional data, and is hereafter referred to as information ) is for general use and is not designed to be used for any specific purpose. There is no guarantee that the information will be published on any particular date or at all. In the circumstances, no liability can be accepted for any loss incurred in any way whatsoever by any person who seeks to rely on or use the information.

4 4 3 Assessment of Rates by Ship Demolition Panellists Ship Demolition Panellists assessments should reflect their expert view as to where the market will trade, should such trade take place that Reporting Day. In reaching their assessments, Ship Demolition Panellists will take into account all relevant market information available to them at the reporting time Ship Demolition Panellists exercise discretion in deciding the relative respective importance of the factors they have considered in reaching their assessment. 4 Quality Control Quality control of the vessel demolition assessments falls into three categories: 4.1 Quality Control in appointment of Ship Demolition Panellists Before being appointed a Ship Demolition Panellists the broking firm commits to: Acknowledge in writing its acceptance of the BDA rules; Continue to satisfy the Baltic Exchange as to its competence and suitability to report assessments; Appoint a Principal and where possible a Nominated Deputy who are responsible to the Baltic Exchange for the performance of their firm's obligations as Ship Demolition Panellists. Such Principal shall have the appropriate expertise acceptable to the Baltic and will be replaced if so required by the Baltic; Accept that all information provided by the panellist to the Baltic Exchange, remains confidential between the panellist and the Baltic.

5 5 4.2 Quality Control of the Ship Demolition Panellists' Reports Ship Demolition Panellists' reports are monitored on a weekly basis by the Baltic Exchange, and panel reporting companies are visited for a quality audit by the Baltic Exchange at least once a year. More specifically, the objective of the audits is to demonstrate that: A Principal and where possible a Nominated Deputy who are included in the List of Members are appointed and a list of these is maintained; Form an opinion as to whether the individual panellist has exercised due care and diligence in arriving at their assessments in accordance with this manual as may be amended from time to time; Ensuring that the annual Ship Demolition Panellists reporting questionnaire has been received from all Panellists. A copy of the questionnaire is shown in Appendix 3. In addition, the Freight Indices and Futures Committee (FIFC) regularly reviews reports from the Baltic Exchange on the quality of Ship Demolition Panellists returns. This will include a graphical monitoring of each Panellist s assessments compared to other submissions, highlighting any large variations between assessments submitted by the full range of Ship Demolition Panellists, and demonstrating whether any one Panellist shows consistent and questionable deviation from other Ship Demolition Panellists.

6 6 4.3 Form of Reports and Data Retention Each panel company appoints a Principal who is responsible to the Baltic for the firm's returns. The Principal may in turn appoint individual reporting brokers to act as demolition assessors. Details of such assessors will be notified to the Exchange in the prescribed form. All assessments must be submitted by 1500 London time. Assessments must be checked by the Principal before being sent to the Baltic Exchange. Ship Demolition Panellists must maintain their own record of their reports for twelve months, and be in a position to justify them to the Baltic Exchange. The Exchange retains records of Ship Demolition Panellists reports for five years. 5 Baltic Exchange Code of Practice Staff of the Baltic Exchange is not permitted to trade in the FFA markets or any BDA derivative products. They must not make available any information concerning panel reports to any party outside either the Baltic management, or the FIFC. No restrictions are placed on FIFC committee members, panel companies or their employees, acting either as brokers for, or as principals in, the derivative markets. The information available to members of the FIFC in the course of their duties must not be passed or otherwise made available outside the Committee, except in reports of quality assurance to the Baltic Exchange Board of Directors. Weekly reports from Ship Demolition Panellists are strictly confidential between the Baltic Exchange and the panel company.

7 7 DESCRIPTIONS APPENDIX 1 The assessments on which the Panellists report are: One light displacement long ton scrap derived from a dirty tanker of between 15,000 and 25,000 light weight, gas free for man entry. Delivery China (15/30 days), as is, under own power, cash price, basis standard commission. One light displacement long ton scrap derived from a dirty tanker of between 15,000 and 25,000 light weight, gas free for man entry. Delivery Subcontinent (15/30 days), as is, under own power, cash price, basis standard commission. One light displacement long ton scrap derived from a product tanker of between 6,000 and 10,000 light weight, gas free for man entry. Delivery China (15/30 days), as is, under own power, cash price, basis standard commission. One light displacement long ton scrap derived from a product tanker of between 6,000 and 10,000 light weight, gas free for man entry. Delivery Subcontinent (15/30 days), as is, under own power, cash price, basis standard commission. One light displacement long ton scrap derived from a bulk carrier of between 7,000 and 12,000 light weight. Delivery China (15/30 days), as is, under own power, cash price, basis standard commission. One light displacement long ton scrap derived from a bulk carrier of between 7,000 and 12,000 light weight. Delivery Subcontinent (15/30 days), as is, under own power, cash price, basis standard commission.

8 8 APPENDIX 2 Baltic Demolition Panellists. ACM Singapore Compass Maritime Services Clarksons JV Shipping Optima Shipbrokers Simpson Spence & Young

9 9 APPENDIX 3 SALE AND PURCHASE PANELLISTS REPORTING QUESTIONNAIRE PANELLIST S NAME:.. QUESTION 1. Have you notified the Baltic Exchange of the name of your principal together with any changes made during the year? ANSWER 2. Have you notified the Baltic Exchange of the names of those persons who will compile the information to be supplied to the Committee together with any changes made during the year? 3. Have you delivered on every relevant London working day to the Baltic Exchange, by 1500 hours London time, information concerning values in respect of Ship Demolition assessments? 4. Have you retained a copy of each Report for a period of at least twelve months from date of delivery? Name: Signed : Completed by principal: Date