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eXRP Launch Meeting

6 th September 2012 Hotel Russell, 1 – 8 Russell Square, Bloomsbury , London. eXRP Launch Meeting. Contents/Agenda. Service Launch Announcement Demonstration Service Description Next steps. Service Launch Announcement. Service Launch Announcement. EFETnet together with

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eXRP Launch Meeting

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  1. 6th September 2012 Hotel Russell, 1 – 8 Russell Square, Bloomsbury, London eXRP Launch Meeting

  2. Contents/Agenda • Service Launch Announcement • Demonstration • Service Description • Next steps

  3. Service Launch Announcement

  4. Service Launch Announcement EFETnet together with APX/ENDEX EEX and ECC GFI Group MarexSpectron NOS Clearing OMIClear ICAP Tullett Prebon Honourable mention for NewEdge, UBS and BNP-Paribas, RWE S&T and GdFT Announce the ‚go-live‘ of the electronic eXchange Related Process (eXRP) for cleared and clearable off-exchange executed trasnactions.

  5. Some quotes from participating organisations “MarexSpectron have a track record of early adoption of market initiatives and we are really pleased that we’ve been able to help bring eXRP live, the process definitely supports where the market’s heading in terms of cleared products and MarexSpectron are happy to be leading” – Rob Palmer, MarexSpectron

  6. Some quotes from participating organisations “GFI have committed significant time and effort to getting eXRP live because we believe it will help ensure that GFI can continue to offer a top quality service in the face of increased demand for cleared and clearable products from our clients”. – NikKakoullis, GFI

  7. Some quotes from participating organisations “This new connection facilitates the implementation of regulatory requirements for trading participants and at the same time enables them to safely and easily forward over-the-counter transactions to ECC for settlement,” - Steffen Köhler, Chief Market Officer at EEX

  8. Some quotes from participating organisations “Efficiency and risk mitigation are core to APX/ENDEX’s services, we see the eXRP mechanism as a way of extending these principles through establishment of straight through processing with other electronic execution venues that offer our products.” - Laurent Virassamy, APX/ENDEX

  9. Some quotes from participating organisations “As a leading provider of trading and clearing services in the Iberian energy market, OMIP are pleased to participate in this European wide initiative that puts in place the essential infrastructure necessary for growth and development of the European energy marketplace as a whole.” - João Morais, OMIClear

  10. What does eXRP provide in Phase 1? Phase 1 focuses on standardising and automating the clearing registration of off-exchange cleared and clearable products: Non-discriminatory, open standard, industry owned and governed infrastructure establishing straight through processing (STP) integrating all participating execution and clearing venues A ‘plug & play’ interface providing all MTFs with connectivity to all clearing services and vice versa – immediately on connection An on-line portal for each participant (including traders) to view and monitor the progress of their cleared deals from execution through to clearing confirmation Single integrated channel for all off-exchange clearing traffic simplifying, standardising and automating the registration process Secure, reliable infrastructure with a dedicated service team to monitor performance and manage and resolve issues

  11. What other benefits? Straight Through Processing (STP) • Removal of manual ‘breaks’ and reduction in operational risk when registering a deal for clearing • Speed of registration from execution to clearing confirmation • Standardised issue identification, resolution and audit trail Auto-Take Up (EEX specific benefit) • Removes manual procedures at the trader organisation • Removes risk of broker being left holding an open position Regulatory reporting • Shared platform for regulatory reporting of cleared transaction data – as required eXRP Phase 2 • Standardisation of GCM/Trader data exchange • Reconciliation services for cleared business

  12. Rationale for eXRP and other EFET standardisation initiatives Vertically integrated proprietary ‘siloed’ market model Execution Trading Proprietary integration Confirmation Risk mitigation Clearing Regulatory Reporting Compliance Choice and opportunity are limited by vertical integration

  13. Choice and opportunity Rationale for eXRP and other EFET standardisation initiatives Horizontally integrated market model with choice. Execution Execution Execution Execution Non-discriminatory access Open access through standardised industry owned integration infrastructure Confirmation Clearing Confirmation Clearing Open access through standardised industry owned integration infrastructure Regulatory Reporting Regulatory Reporting Regulatory Reporting Regulatory Reporting eXRP, eCM and eRR (Regulatory Reporting) aim to minimise impact of market change and maintain choice and opportunity.

  14. Demonstration

  15. eXRP Participants Clearing Registration Agents Brokers Traders

  16. How Does eXRP Work? Broker(UMTF) EFETnet CMSeXRP RegistrationAgent (CRA) ClearingHouse (CA) Submit eXRP Trade A few seconds… Submit Clearing Request ProprietaryClearing Interface Timing Depends On CA Clearing Response A few seconds… eXRP Response

  17. eXRP Process – 4 Steps to Clearing submit trade for clearing Broker (UMTF) PENDING (EXRP) document consistent and complete?sender authentic?CRA known? validate broker submissionsubmit clearing request to CRA EFETnet CMS OK PENDING (CRA) product supported?buyer/seller/broker parties known?agreements in place? Registration Agent(CRA) validate clearing requeststart clearing transaction OK PENDING (CA) received within registration hours?unit price in valid range? within operational limits? grant or refuse clearing Clearing House (CA) OK CLEARED

  18. eXRP Broker Document (complete) Address Block CRA / CA Indentification Deal Terms CRA-specific additional fields Product properties Buyer/Seller/Broker information

  19. eXRP Broker Document (1/2)

  20. eXRP Broker Document (2/2)

  21. eXRP – User Interface Features Dashboard  Live view on clearing activity Deal Finder  Inquiry screen Deal List  Adaptable, exportable trade detail screen Mail Alerts  Real-Time escalation of process exceptions

  22. eXRP Dashboard

  23. eXRP Dashboard  Deal List Drilldown

  24. Deal List Export

  25. Deal List Customization

  26. User Interface Features – Deal Finder

  27. Mail Alerts – Real Time Notifications

  28. User Interface Features – Mail Alerts ======= HEADER =================================== From : EFETnet CMS (Live) [mailto:notification@cms.efetnet.org] Sent : Wednesday, 2 May 2012 16:25To : Recipient#1; Recipient#2; Recipient#3Subject : eXRP Alert | [ERROR] CRA rejected clearing request ======= BODY =================================== Event : CRA rejected clearing request as invalidOccurred : 02/05/2012 16:25:43 +00:00 Deal ID : 2190912@23XICAP2345-Q Status : ERRORCRQ Document ID : CRQ_329892833@CMS-EXRP-LIVE [version 1] UMTF Document ID : XBN_9898343@23XICAP2345-QError Type : UNKNOWN PRODUCTError Code : 8934Error Description : Unsupported product code “UK-GAS-Q4”

  29. Service Description

  30. Benefits fo the service The service will: Host and run the EFETneteXRPsoftware. Monitor and maintain communications between service and users Resolve all communication issues between service and users On-board new users Facilitiate any testing Provide training Maintain static data and mappings (with participation of CRAs) 24x7, 99% available for all planned hours (including DR) Log and manage issues through to resolution Meet response times and report on performance Guarantee system performance and response times

  31. Take –on of new MTFs (execution platforms) Select CRAs you wish to go live with Implement broker clearing documents • Get the schemas and document specifications • Product lists are available for different CRAs • Integration tools are available (sample documents, sample generators, validators) Implement eXRP clearing logic in your backend (once for all clearing venues) • Submit documents to CMS eXRP • Get feedback from CMS eXRP • Implement amendments Get connected to the CMS test system • Fill in a joiner form for account setup • Get your backend connection configured (reusing your eCM setup) • For EEX clearing get an eXRPEurex account from EEX • Schedule tests with your CRAs of choice • Use the various feedback channels to spot integration errors (electronic feedback, mail alerts, GUI) Go live • Sign up • Connect to the live system • Start clearing

  32. Take –on of new Clearing Registration Agents (Exchanges/Clearing providers) Select brokers you have clearing relations with Implement electronic eXRP documents • Map your products to the eXRP document structure • Map traders to EIC codes • Samples, document generators and validators available • Any aspect cannot be represented? Ask EFETnet for custom extensions Implement the eXRP process • Process clearing requests • Implement validations and produce acceptance/rejection responses • Implement a bridge to the clearing system and produce clearing/refusal responses Get connected to the CMS test system • Fill in a joiner form • Install the CMS messaging infrastructure and have it configured • Schedule tests with brokers of your choice • Use the various feedback channels to spot integration errors (electronic feedback, mail alerts, GUI) Go live • Sign up • Publish your product list • Connect to the live system Start clearing

  33. Next Steps (Future Plans)

  34. Next steps Technical developments • End Oct 2012 • Auto-Take Up for EEX products • Trader real-time monitoring portal Expanding the eXRP community • Bring on brokers • ICAP • TullettPrebon • TFS • Others • Bring on clearing venues • CME • LCH • Others eXRP Phase 2 • Create standards for Trader/GCM data exchange • Develop potential reconciliation services for • Trades of the day • Position reports • Margining and Settlement

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