Environmental Financial Products, LLC

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Environmental Financial Products LLC
Headquarters Chicago, IL
Key People Dr. Richard Sandor, Founder and CEO

Environmental Financial Products LLC specializes in inventing, designing, and developing new financial markets with a special emphasis on investment advisory services. It was established in 1998 by Dr. Richard Sandor.

EFP has served as an incubator for many different types of investment services and products. While it has researched and developed products that focus on environmental contracts such as environmentally-focused contracts, the firm has also developed initiatives that address other aspects of the financial industry. In September 2015, for example, it announced a new exchange directed at small- to middle-sized US banks, which would serve as a platform for short-term over-the-counter lending and borrowing as well as an interest rate index for those banks.

Background

EFP provides advisory services focused on monetizing emission reductions, energy efficiency improvements, and carbon sequestration as well as managing exposure to financial risk. It acted as an advisor to various early greenhouse gas international transactions, and members of its team led the design and implementation of the SO2 emission allowance market in the United States.

Under a grant from the Joyce Foundation in Chicago and through Northwestern University’s Kellogg Graduate School of Management, EFP was the incubator for the first North American greenhouse gas emissions trading program, the Chicago Climate Exchange. CCX was launched in 2003, and in 2004 it became a part of Climate Exchange plc (CLE), a London Stock Exchange listed company.[1]

On September 10, 2015, Environmental Financial Products and CBOE Holdings announced plans to launch the American Financial Exchange (AFX), an electronic marketplace for small and mid-sized banks to lend and borrow short-term funds. AFX was designed to bring the benefits of exchange trading, including standardization, transparency and a rules-based process, to interbank lending, while reducing transaction costs through an electronic market.

Set for launch in late 2015, AFX will also offer weekly auctions of a new benchmark interest rate for U.S. interbank lending, called Ameribor, based on proprietary calculation methodology developed by EFP.[2]

CBOE will operate the web-accessible electronic trade matching engine and will also support surveillance and membership services. Northern Trust will serve as the settlement bank.

Dr. Sandor will act as chairman and CEO of AFX.

Products and Services

Key People

  • Richard L. Sandor, chairman and chief executive officer
  • Murali Kanakasabai, managing director
  • Rafael L. Marques, managing director of environmental financial products

References

  1. About Us. Environmental Financial Products.
  2. Environmental Financial Products, LLC (EFP) and CBOE Holdings, Inc. (CBOE) Announce New Interbank Lending Exchange and Interest Rate Benchmark. Press Release via PR Newswire.