New regulation on Benchmarks in Europe from Jan 2020. Changes in the Fish Pool Index

The Fish Pool Index settlement price will be changed from January 2020:

FPI 2020

Background for the change:

After the LIBOR scandal, where banks manipulated the interest rates, EU has introduced a new regulation on Benchmarks used for settlement of financial contracts.

The Nasdaq Salmon Index and the Fish Pool Index settlement price are Benchmarks.  From January 2020 these indices will be under supervision by the Financial Supervisory Authorities.  This give the users added security of the quality and correctness of the prices indices.

The Nasdaq price is based on documented invoices sent from Norwegian exporters, and Kontali Analyse audits the reporters.  SSB is produced by Statistics Norway.  Both are thus very solid and well documented indices.

There are more than 40 European companies from 14 different European countries reporting spot purchase prices in the European Buyers Index.  We thus consider the index to be very solid, but at present it does not comply with the strict Benchmark Regulation rules.  We have thus excluded the index from the calculation of the Fish Pool Index settlement price for all financial contracts.  We will however continue to operate this European Buyers Index, and possibly include again in the Fish Pool Index.  As Nasdaq Salmon Index is now weighted 95%, we hope the exporters understand that it is very important to have as many as possible of the exporters reporting to Nasdaq.

The changes in settlement price, Fish Pool Index would have been the following if we had used the new calculation (95% Nasdaq and 5% SSB export price) the latest 2 years:

  • + 0,05 NOK/kg for 2018,
  • + 0,02 NOK/kg for 2019 so far week 1-47, equal to 0,3% change

So very small change for the buyers and sellers using Fish Pool contracts to secure their income and cost expected with the new formula in 2020 contracts onwards

Please see overview of the FAQ,  Frequently Asked Questions, of the Nasdaq price. For reporting procedures and historical figures, please see Nasdaq Salmon Index