Post on 19-Jan-2016
transcript
1
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
NASDAQ OMX Commodities
2
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
NASDAQ OMX Commodities Clearing Company - Agenda
Welcome• NASDAQ OMX Commodities Clearing Company overview
NASDAQ OMX current Structure for OTC single counterparty services
NASDAQ OMX proposal to outsource single counterparty services
NASDAQ OMX advantages to single counterparty services
Q&A/Closing
This proposal, including the PowerPoint presentation, additional materials that may be provided NASDAQ OMX Commodities Clearing Company (NOCC) and any discussions by employees and representatives of NOCC (the “Proposal”) represents a general overview of single counterparty services that may be provided by NOCC for power transactions in ERCOT. This Proposal is preliminary and for discussion purposes only, and any or all components thereof may change prior to developing a final proposal. This Proposal is for the purposes of exploring the feasibility of NOCC offering services as a single counterparty, and should not be construed as an offer of services. NOCC makes no representation as to the feasibility of the Proposal or commercial results if the Proposal is
implemented.
3
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
3
NASDAQ OMX COMMODITIES – NOCC History
• 2003-2004 - North American Energy Credit and Clearing (NECC) is created to Clear OTC Power and Natural Gas Transaction
• 2005 - NECC is accepted as a Qualified Scheduling Entity (QSE) at ERCOT
• 2006 - NECC clears its first Electricity and first Natural Gas transactions
• 2010 - NASDAQ OMX Commodities Clearing Company, a wholly owned subsidiary of NASDAQ OMX Group, Inc. purchases the business of North American Energy Credit and Clearing (NECC), a Chicago – based single counterparty for over-the-counter (OTC) power and natural gas markets
NASDAQ OMX Commodities/Nord Pool – The Largest Power Exchange
Members
NASDAQ OMX Commodities 394
EEX 199
APXEndex 68NASDAQ
OMX Commodities
OMEL
N2EXAPX
APXEndex
EEX
Gielda Energii
Powernext
Borzen
EX AA
GME
EPEX Spot
HUPX
Belpex
OPCOMOMIP
5
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
NOCC Collateral Annex & Special Provisions
NASDAQ OMX Commodities Clearing uses the ISDA Master Agreement in its current ‘riskless-principal’ trading business
FERC Market-Based Rate Authority
Physical gas scheduling at over 50 gas market centers including 31 pipeline pooling locations
Eligible contract participant
payment on 22nd , sellers receive funds 25th day of the month following delivery
Net Exposures for Margining•Current (AR/AP)•Variation (MtM)•Potential
Collateral Support•Cash•Non-cash (letters of credit)
Submit all physically settled transaction information quarterly
ISO/RTO/NERC registered to schedule and transfer title
6
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
NASDAQ OMX Proposal to provide Single Counterparty services to ERCOT
• NOCC proposes a Three Phased approach- Phase One – Designate NASDAQ OMX Commodities Clearing
Company (NOCC) as single counterparty on behalf of ERCOT, thereby taking title to all transactions with market participants in order to take advantage of some bankruptcy law requirements and better protect ERCOT member’s in the event of another member’s default.
• No changes to ERCOT operations
- Auction and scheduling
- Settlements and invoicing
- Default Allocations
• Minimal revisions to ERCOT collateral and credit management
7
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
NASDAQ OMX Proposal to provide Outsourced Clearing services to ERCOT
• NOCC proposes a Three Phased approach (con’t.)
- Phase Two
• Evaluate and provide an assessment on changes to protocols that could reduce member’s default uplift risks
• provide guidelines to incorporate the ability to Off-set Market Obligations (improved netting) within ERCOT.
- Phase Three – NOCC will outline ways to improves liquidity and capital efficiencies through multi-RTO market as well as multi-fuel commodity netting.
8
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
NASDAQ OMX Proposal to provide Outsourced Clearing services to ERCOT
• Advantages to NOCC
• Takes and transfers physical title to the commodity using standard commercial agreements and practice
• Currently provides similar single counterparty access for ERCOT market participants via inter-QSE schedules
• The only single counterparty entity that is a FERC licensed power marketer thus allowing NOCC the ability to explore the use of ERCOT positions to net against NOCC OTC physical positions
9
© Copyright 2010, NASDAQ OMX Commodities Clearing Company. All rights reserved.
NASDAQ OMX Commodities
Questions and Answers