onExchangeSM, Inc., a provider of clearing and transaction processing technology, announced today that London Clearing House (LCH)had selected onExchange’s Extensible Clearing System (ECS) as the basis for its clearing of over-the-counter (OTC) power transactions executed on the European Energy Derivatives Exchange (Endex), which is set to launch later this year. The selection marks the culmination of more than a year of intensive work between LCH and onExchange to develop a new clearing system for energy products, including OTC and standardized instruments.
“The business case for clearing OTC markets through a central counterparty is powerful, indeed it has the potential to transform markets through improved liquidity, transparency, risk management and cost effectiveness” says Arun Aggarwal, LCH Managing Director for Business Management. “onExchange technology provides a modern solution to the considerable systems challenges that OTC energy products present to a clearinghouse.”
“LCH’s support of existing OTC market trading protocols in addition to futures-style clearing will accelerate the adoption of centralized clearing by OTC commodity and financial market participants and bring significant operational and financial benefits to the entire derivatives trading community, ” adds Richard Jaycobs, CEO of onExchange. “LCH is a leader in adopting advanced clearing technology and we look forward to building our relationship with LCH as it expands into other markets, as well as developing relationships with end users.”
onExchange, Inc., provides an open-standards-based back office technology to clearinghouses, banks, and brokerage firms. Its technology has been selected for use in energy clearing markets such as EnergyClear Operations Company LLC. onExchange technology partners include BEA Systems Inc., Oracle Corporation, Sun Microsystems, Inc. and HP solutions. The Company is privately held and headquartered in Cambridge, Mass.
Endex (European Energy Derivatives Exchange) is the successor, by change of name, of the former Amsterdam Power Exchange NV. In May 2001, the spot market activities were sold to the Dutch Transmission System Operator TenneT and renamed APX Spotmarket B.V. Endex will provide OTC clearing services for Dutch and Belgian physical power contracts. The current shareholders of Endex are large companies active or related to the Benelux energy market.