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eClearinghouse

A global company providing seamless trade services for over-the-counter energy trades, including confirmation, margin, and settlement processes, all at the click of a button.

jenniferfranklin
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eClearinghouse

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  1. eClearinghouse Electronic Processing of Over-The-Counter Energy Trades October 1999

  2. The eClearinghouse Vision A global company providing trade services for over-the-counter energy trades, including confirmation, margin, and settlement processes, all at the click of a button

  3. Trade Data Seamless Trade Data Confirm Trade Data Margin Invoice Dedicated Internet How Does It Work? Trade data is sent to eClearinghouse via the Internet or dedicated lines - directly from the counterparties’ trading systems. Processed Trade C/P A C/P B Processed Trade

  4. CONFIRMATION MARGINING • INVOICING What Services Are Performed? eClearinghouse performs all or part of the following: Seamless notification, confirmation and recording. Global ID and warehousing. Enable electronic signatures. NO FAXES OR MANUAL PROCESSING! • Daily cash margining for transactions marked to exchange settlements or indices. Regulated eClearinghouse entity holds margins and/or acts as central counterparty. • Settlement of financial and, possibly, physical • trades. Interactive process with counterparties, • brokers, operators and banks.

  5. What are the critical issues? • Building Critical Mass • Reliable, Secure and Scalable Technology • Global Legal and Regulatory Structures • Independent Operation

  6. Building Critical Mass • Partnership with Leading Energy Companies • Connect with Leading Trading Systems • Transition with Market • Phase 1 (1st Qtr 2000)- confirmation service only with partners • Phase 2 (2nd Qtr 2000)- expanded confirmation service with limited margining • Phase 3 (2nd or 3rd Qtr 2000)- full range of confirmation, increased margining, financial settlements.

  7. Technology • Confirmation, Margining & Settlement Systems • Integration Module for Legacy Trading Systems • EnergyML - The Standardised Data Language for Energy Trades and Nominations. firewall eClearinghouse Company A Confirm EnergyML Language Converter Language Converter Margin Integration Module Integration Module Internet or Dedicated line Settlement firewall

  8. Legal and Regulatory Issues • Phase 1 - No major impediments in North America or Europe • Phase 2 - Margining will require regulation or partnership with existing clearing firm. • Electronic Signatures • USA • Bliley/Davis sponsored Electronic Signature Bill - H.R. 1714 • Commodities Futures Trading Commission Proposed Rules issued August 1999. • Europe • Directive on a Common Framework for Electronic Signatures • 2001 (or 18 months given to member states from the entry into force) - implementation completed

  9. Independent Operation • Independent Operation • Separation of management and ownership • Separate independent location • Periodic Auditing • Ownership • No majority ownership • Strategic partners • Top tier energy companies • Prestigious Technology Companies

  10. Equity partners  Partner Test  Phase 1 (confirmation) Phase 2 (margining & settlement)    Other equity partners IPO eClearinghouse Milestones 4Q 991Q002Q00 3Q00 4Q00 1Q012Q01

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