Nymex Holdings (NYSE:NMX), the parent company of the New York Mercantile Exchange (NYMEX), and LCH.Clearnet Ltd today announced that they have signed a Heads of Terms to introduce a broad range of global energy products.
This historic alliance will deliver improved capital and operational efficiencies through wider execution capabilities, broader credit intermediation and margining benefits for customers and market participants.
Under the terms of the arrangement, NYMEX will offer a new and distinct slate of OTC and futures products for clearing through LCH.Clearnet. This initial slate will encompass the global benchmark oil contracts, including WTI, Brent and Gasoil, as well as key natural gas and electricity contracts. The contracts are expected to begin trading and clearing in mid-2008, pending regulatory approval.
The contracts will be listed for trading on the CME Globex electronic trading system and on NYMEX ClearPort for submission for clearing. They will be cleared by LCH.Clearnet using existing and widely distributed clearing technology, thus optimizing operational efficiencies for market participants.
NYMEX Chairman Richard Schaeffer said, "The worldwide distribution of NYMEX's trading and depth of markets, combined with the LCH.Clearnet clearing and regulatory structure, is a winning combination for market participants. The benefits to clearing firms, commercial users, and market makers will be significant, including margin and other capital efficiencies, access to established global markets, an increased product slate and the ability to transact business virtually 24 hours a day. This is a solution that the market has been demanding, and we are very pleased to be working closely with LCH.Clearnet to provide it."
LCH.Clearnet Chief Executive Officer Roger Liddell said, "LCH.Clearnet is very pleased to be working with NYMEX in delivering trading and clearing services in key global energy contracts and enabling margin benefits between Europe and the United States. This is a clear example of the advantages that can be enjoyed through the services of an independent, appropriately-regulated clearing house to deliver service in both Europe and the US. With its welll-proven risk management capabilities and a diversified multi-asset class default fund structure, LCH.Clearnet is ideally positioned to join forces with the world's largest energy exchange."