Baltic Exchange sets out modernized Code for freight market

The Baltic Exchange will be introducing a modernized code of conduct for shipowners, charterers and shipbrokers using the physical shipping and freight derivatives markets.

Following a detailed review of the current arrangements led by law firm Norton Rose Fulbright, with oversight from the Baltic Exchange Council and the Baltic Membership Council, the New Baltic Code has been drafted to bring together a set of principles and business practices which will be applicable to both members of the Baltic Exchange and the wider market.

The new code has a greater focus on fairness & competition, anti-bribery & corruption and benchmarking-related issues.

Speaking at Singapore Maritime Week, Baltic Exchange Chief Executive Mark Jackson said that “times have changed and Baltic Exchange members are operating in an environment with a greater focus than ever before on compliance. Shipping cannot expect to escape the heightened political and regulatory scrutiny that has been placed on the commodity markets since the 2007-2009 global financial crisis. By introducing this new code of conduct, we want to preserve confidence in and the integrity of the physical freight and freight derivatives markets; eliminate poor practices and raise standards across the entire market as well as increase the attractiveness of doing business with Baltic Exchange members.”

The New Baltic Code will be binding on members of the Baltic Exchange and members will be expected to promote compliance amongst all market participants. Members of the Baltic Exchange will be expected to refrain from doing business with counterparties who deliberately refuse to adhere to the principles and good practice standards set out in the New Baltic Code.

The New Baltic Code is currently being reviewed by the Baltic Exchange Council and will be published later this year.