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© Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved. UK FINANCIAL FUTURES SOLUTION FOR SECURE AND PROMOTE OBLIGATED PARTIES.

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Presentation on theme: "© Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved. UK FINANCIAL FUTURES SOLUTION FOR SECURE AND PROMOTE OBLIGATED PARTIES."— Presentation transcript:

1 © Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved. UK FINANCIAL FUTURES SOLUTION FOR SECURE AND PROMOTE OBLIGATED PARTIES

2 NASDAQ OMX AND N2EX MILESTONES SINCE 2010 Secure and Promote solution next step for remodeling of UK Power Market N2EX Auction now firmly established as UK Benchmark Volumes to reach 140 TWh cleared on the Auction Daily volumes at 50% of UK Generation Membership to reach 45 by year end UK Futures successfully launched in 2011 Volumes remain low with slow general uptake of Clearing in UK Contracts have been traded by over 20 distinct counterparts Gregorian Calendar, Cash settled versus Auction, automated give-up of Broker trades through Clearing Gateway, no requirement for BSC status or GTMA setup Market Maker Supervision software immediately available – automated reporting 2

3 3 Daily Auction Volume since launch in Jan Now touching 500GWh per day - True benchmark capturing upto 50% of Day Ahead Generation

4 Note: Seasons are cascaded to quarters, and quarters to months. NASDAQ OMX - UK FUTURES PRODUCT STRUCTURE Q – Q – Q Q Q Q Q Q W W W W W W W W W W JUL AUG SEP JAN FEB MAR APR MAY JUN OCT NOV DEC Quarters Weeks Months WS – WS – Seasons SS – SS – Winter Season (WS)Summer Season (SS) Ticker Code: EUK Electricity UK BASE : 5 week (168 h), 4 Month (e.g. 744 h), 5 Quarter (e.g h), 5 Season (e.g h) PEAK : 5 week (60 h), 4 Month (e.g. 264 h), 2 Quarter (e.g. 780 h) – Peak Seasons to be added during Q

5  Existing Market Makers and MM contract structure in place for UK Power Futures  Tried and tested technology used extensively in Nordic Equity and Derivative Markets  Existing members to have immediate access to service 20+ live participants, 300+ NOMX Commodities Members  GCMs have confirmed their ability to provide access to functionality for NCMs  Attractive fee solution in tandem with Secure and Promote introduction UK FUTURES CURRENT STATUS AND READINESS FOR SECURE AND PROMOTE 5

6 © Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved. MARKET MAKER SUPERVISION – MMS SOFTWARE SOLUTION FOR S&P

7  NOMX’s Market Maker Supervision (MMS) software is a proven system – in use globally across multiple asset classes.  MMS is embedded within the trading system which allows for real-time feedback to MM’s in the event of failing obligations  MMS can support a range of obligation parameters including Fast Market rules (as a parallel obligation rule set).  MMS’s stated functionality in this document is already in use and deployable to NASDAQ’s UK Power offering 7 NASDAQ OMX Market Making Software: MMS: Market Maker Supervision

8 MEETING THE OBJECTIVES OF SECURE AND PROMOTE: ALL OBLIGATIONS CAN BE MET BY MMS AND THE TRADING WORKSTATION 8

9  B1 – Nominating a third party  NOMX can facilitate a third party MM to access the NOMX trading platform  We await interest from suitable providers  B2 – Platform  NOMX meets the requirements for a GB wholesale electricity market trading platform – 17 Licensed Suppliers with access + Over 300 Commodities Members  B3 – Products  All products already listed except Seasonal Peaks which will be live before Secure and Promote implementation 9 Requirements in Detail:

10  B4 – Availability  MMS has the ability to monitor all parameters and can handle multiple parameters for each MM or subsets  MMS can support any time period of required obligation, both the % of time quoiting and the obligation window.  B5 – Bid offer spreads  NOMX can support both percentage and flat price spread solution  B6 – Obligation to trade  The NOMX trading platform requires that any ‘hit’ quotes are tradable.  B7 – Trade size  MMS can configure minimum trade size NOMX MARKET MAKER SUPERVISION APPLICATION TO OFGEM’S S&P 10

11 AUTOMATION - AIM TO SIMPLIFY THE REPORTING FUNCTION FOR ALL OBLIGATED PARTIES: If MM Obligation is breached it is possible to configure MMS so that: An alert is sent to the market maker MMS produces Obligation fulfillment reports at end of day to verify performance of the S & P requirements: Reporting can be automatically sent to the obliged Market Maker and/or Ofgem as required 11 NOMX MARKET MAKER SUPERVISION ALARMS AND REPORTS

12  NASDAQ OMX to meet with all obligated parties during Dec and Jan  Set out the technical delivery and describe access process  Offer Annual Market Making contract with associated fee rebate  Aim to sign up interested parties during Q and announce roster of MMs to NOMX membership before S&P Go Live NEXT STEPS: TOWARDS SECURE AND PROMOTE – MARCH / APRIL

13 © Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved. THANK YOU


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