Clearing

NASDAQ OMX Clearing (NASDAQ OMX Stockholm AB), the clearinghouse,  offers clearing services for the UK wholsale physical market - N2EX - for the following physical electricity markets:

• Spot market
• Day-ahead auction market
• Prompt market

In clearing of the contracts, the clearing house assumes counterpart responsibility vis-à-vis seller and buyer alike, i.e. It guarantees the members correct trading positions, cash settlement and physical settlement.

Contracts traded are automatically cleared.

The main advantages of moving contracts to NASDAQ Clearing for clearing is:

• Portfolio management is made easier

• NASDAQ OMX Clearing takes the members’ counterpart risk

• Netting of buy and sell positions, which generally reduces the members’ daily margin calls

• Offering of daily clearing reports through a tailor made application combined with an XML-interface

To have the necessary confidence in the market, NASDAQ OMX Clearing must minimise its risk, particularly market risk and settlement risk. The clearing system services are modelled after other well-developed markets.

To minimise risk, NASDAQ OMX Clearing places great emphasis on efficient settlement routines for the various types of contracts, as well as on collateral. Short deadlines for settlement enable the clearing service to minimise the members' collateral.

Daily clearing is accomplished through an integrated banking and data processing infrastructure. The clearing concept implemented by NASDAQ OMX Clearing includes close technical integration with a set of banks from several countries. NASDAQ OMX provides the system services related to the business activities.