American Financial Exchange (AFX)
|American Financial Exchange|
|Key People||Richard Sandor, Chairman and CEO|
The American Financial Exchange is an electronic marketplace created by Dr. Richard Sandor where small and midsized banks — mainly those with about $1 billion to $50 billion in assets — can lend and borrow short-term funds. It allows smaller banks to trade directly with each other in a forum that discloses bid and ask prices but allows users to remain anonymous. The exchange, which launched on December 11, 2015, offers a daily market for overnight and 30-day loans.
Currently the AFX has 153 members across the U.S. AFX has a presence in 35 states and Puerto Rico, representing financial institutions with under $150 billion in assets.
It also has created a new STIR benchmark called the "Ameribor," a transaction-based interest rate benchmark for small- to mid-sized banks. AFX publishes its Ameribor rate on the website www.ameribor.net. A futures contract on the benchmark will be offered on AFX's partner exchange Cboe Futures Exchange on August 16, 2019, the 42nd anniversary of the launch of Treasury bond futures.
AFX is an effort to bring standardization and transparency to interbank lending while reducing transaction costs through an electronic market.
On its first day of trading on Friday, December 11, 2015, a total value of $15 million was transacted, which the exchange said had exceeded expectations.
AFX opened on December 11, 2015 with six banks as members and extended its membership beyond banks to also include broker-dealers, private equity firms, business development corporations, hedge funds, futures commission merchants, insurance companies, asset managers and finance companies.
AFX membership grew to 68 institutions (60 banks and 8 non-banks) as of December 12, 2017, and 80 members (70 banks and 10 institutions) on March 9, 2017. By June 2019, it has 150 participants including: banks, broker-dealers, private equity firms, business development corporations, hedge funds, futures commission merchants, insurance companies, asset managers and finance companies.
It posted a record trading day on March 15, 2018 across AFX products of $700 million, and a record week that week with $2.5 billion worth of trades. On April 15, 2019, AFX posted a one-day record of $2.52 billion traded across all AFX products. AFX hit a milestone on July 23, 2019, reaching $502 billion in interbank lending and borrowing on the platform since the launch of AFX in 2015.
In August 2019, it launched its first futures product, AMERIBOR futures, on the Cboe Futures Exchange. The exchange offers three-month and seven-day contracts, with other short-term contracts to be added.
Products and Services
AFX currently provides the following categories of products:
- AMERIBOR Futures: cash-settled three-month and seven-day contracts based on the compounded daily annualized AMERIBOR interest, or average simple daily annualized AMERIBOR interest.
- AFX Unsecured Loan Market: a loan market where members commit to lend and borrow short-term funds electronically based on standardized contract specifications.
- AFX Secured Loan Market:a loan market where members commit to lend and borrow short-term collateralized funds electronically based on standardized contract specifications.
- AFX Deposit Market: a demand deposit market where members commit to place demand deposits in banks electronically based on standardized contract specifications.
It also offers the Ameribor Interest Rate Benchmark: The establishment, through a market auction, of a transaction-based short term benchmark interest rate called "Ameribor" specifically designed for the needs of mid-sized American banks based on actual transactions and a proprietary calculation methodology.
- Richard Sandor, chairman and CEO
- Ed Berko, managing director of financial and operations
- Sara Higgins, managing director of sales and marketing
- Craig Benson, vice president of sales and marketing
- Rafael Marques, managing director of research and product development
- Cboe Futures Exchange and American Financial Exchange Announce Planned Launch of AMERIBOR® Futures. Press Release.
- CBOE, Northern Trust and Sandor team on new financial exchange. Crain's Chicago Business.
- American Financial Exchange (AFX) Announces Results Of Its First Day Of Trading And Future Plans. press release via Mondovisione.
- American Financial Exchange (AFX) Announces Two-Year Anniversary Highlights. American Financial Exchange.
- The American Financial Exchange (AFX) Announces Record Day & Week: Eighty members and membership representing a record of over $1 Trillion in assets. American Financial Exchange.
- American Financial Exchange Reaches Record Volume Levels on AMERIBOR Benchmark, Trading More Than a Half-Trillion Dollars in Value Since Inception. American Financial Exchange.
- About AFX. AFX.