Clearing

With regards to the UK power market, N2EX by NASDAQ OMX
Stockholm AB will offer clearing services for the following physical electricity markets:

• Spot Market
• Day Ahead Auction Market
• Prompt Market

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

Contracts traded at Nord Pool, either physical or financial, are automatically cleared.

The main advantages of moving contracts to NASDAQ OMX Stockholm AB for clearing is

• Portfolio management is made easier

• NASDAQ OMX Stockholm AB 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 Stockholm AB 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 Stockholm AB 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 Stockholm AB includes close technical integration with a set of banks from several countries. NASDAQ OMX provides the system services related to the business activities.