1. NASDAQ OMX Commodities

2. NASDAQ OMX Commodities Clearing Company - Agenda
Welcome
NASDAQ OMX Commodities Clearing Company overview
NASDAQ OMX current Structure for OTC single counterparty services
NASDAQ OMX proposal to outsource single counterparty services
NASDAQ OMX advantages to single counterparty services
Q&A/Closing
This proposal, including the PowerPoint presentation, additional materials that may be provided NASDAQ OMX Commodities Clearing Company (NOCC) and any discussions by employees and representatives of NOCC (the “Proposal”) represents a general overview of single counterparty services that may be provided by NOCC for power transactions in ERCOT. This Proposal is preliminary and for discussion purposes only, and any or all components thereof may change prior to developing a final proposal. This Proposal is for the purposes of exploring the feasibility of NOCC offering services as a single counterparty, and should not be construed as an offer of services. NOCC makes no representation as to the feasibility of the Proposal or commercial results if the Proposal is implemented.

3. NASDAQ OMX COMMODITIES – NOCC History
North American Energy Credit and Clearing (NECC) is created to Clear OTC Power and Natural Gas Transaction
NECC is accepted as a Qualified Scheduling Entity (QSE) at ERCOT
NECC clears its first Electricity and first Natural Gas transactions
NASDAQ OMX Commodities Clearing Company, a wholly owned subsidiary of NASDAQ OMX Group, Inc. purchases the business of North American Energy Credit and Clearing (NECC), a Chicago – based single counterparty for over-the-counter (OTC) power and natural gas markets 3

4. NASDAQ OMX Commodities
NASDAQ OMX Commodities/Nord Pool – The Largest Power Exchange
Members
NASDAQ OMX Commodities
394
EEX
199
APXEndex 68
NASDAQ OMX Commodities
OMEL
N2EX
APX
Endex
EEX
Gielda Energii
Powernext
Borzen
EX AA
GME
EPEX Spot
HUPX
Belpex
OPCOM
OMIP

5. NOCC Collateral Annex & Special Provisions
NASDAQ OMX Commodities Clearing uses the ISDA Master Agreement in its current ‘riskless-principal’ trading business
Physical gas scheduling at over 50 gas market centers including 31 pipeline pooling locations
Eligible contract participant
payment on 22nd , sellers receive funds 25th day of the month following delivery
FERC Market-Based Rate Authority
Submit all physically settled transaction information quarterly
ISO/RTO/NERC registered to schedule and transfer title
NOCC Collateral Annex & Special Provisions
Highlight NOCC physical volume activity
“0” financial swaps open interest
Refresh Ananda’s memory of EEI’s Oct meeting
Flesh out FERC-CFTC ‘Bright-line’ on jurisdiction over physical & financial products
“Contract on terms that are consistent with the material terms and trading conventions on which the contract is then traded.”
Net Exposures for Margining
Current (AR/AP)
Variation (MtM)
Potential
Collateral Support
Cash
Non-cash (letters of credit)

6. NASDAQ OMX Proposal to provide Single Counterparty services to ERCOT
NOCC proposes a Three Phased approach
Phase One – Designate NASDAQ OMX Commodities Clearing Company (NOCC) as single counterparty on behalf of ERCOT, thereby taking title to all transactions with market participants in order to take advantage of some bankruptcy law requirements and better protect ERCOT member’s in the event of another member’s default.
No changes to ERCOT operations
Auction and scheduling
Settlements and invoicing
Default Allocations
Minimal revisions to ERCOT collateral and credit management

7. NASDAQ OMX Proposal to provide Outsourced Clearing services to ERCOT
NOCC proposes a Three Phased approach (con’t.)
Phase Two
Evaluate and provide an assessment on changes to protocols that could reduce member’s default uplift risks
provide guidelines to incorporate the ability to Off-set Market Obligations (improved netting) within ERCOT.
Phase Three – NOCC will outline ways to improves liquidity and capital efficiencies through multi-RTO market as well as multi-fuel commodity netting.

8. NASDAQ OMX Proposal to provide Outsourced Clearing services to ERCOT
Advantages to NOCC
Takes and transfers physical title to the commodity using standard commercial agreements and practice
Currently provides similar single counterparty access for ERCOT market participants via inter-QSE schedules
The only single counterparty entity that is a FERC licensed power marketer thus allowing NOCC the ability to explore the use of ERCOT positions to net against NOCC OTC physical positions

9. NASDAQ OMX Commodities
Questions and Answers