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

4. 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!
CONFIRMATION
Daily cash margining for transactions marked to exchange settlements or indices. Regulated eClearinghouse entity holds margins and/or acts as central counterparty.
MARGINING
Settlement of financial and, possibly, physical
trades. Interactive process with counterparties,
brokers, operators and banks.
INVOICING

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
Language
Converter
EnergyML
Language
Converter
Integration Module
Margin
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
Separation of management and ownership
Separate independent location
Periodic Auditing
Ownership
No majority ownership
Strategic partners
Top tier energy companies
Prestigious Technology Companies

10. eClearinghouse Milestones
Equity partners 
Partner Test
IPO
Other equity partners
Phase 2 (margining &
settlement)
Phase 1 (confirmation)
4Q Q Q Q Q Q Q01