Another exchange business goes vertical

Over at Nodal, an announcement has been made that they are creating their own standalone CCP, and heading for a DCO license. Currently Nodal Exchange clears through LCH.Clearnet, but this relationship will end once NodalClear is operational and approved. The full story is over at the Nodal website (PDF) or below.

WASHINGTON, November 3, 2014
Nodal Exchange, LLC (Nodal Exchange) announced today that it has formed a wholly owned subsidiary, Nodal ClearTM, which will soon submit an application to the U.S. Commodity Futures Trading Commission (CFTC) to be registered as a derivatives clearing organization (DCO).

 

“Nodal Exchange has become a significant part of the North American power market, obtaining a market share of about 25% of all cleared North American power futures contracts open interest, and providing the most granular and diverse set of locations for cleared power contracts,” said Paul Cusenza, Chairman and Chief Executive Officer of Nodal Exchange and Nodal Clear. “We see the decision to form Nodal Clear and apply for registration as a DCO as the next step to support our continued growth and to allow us to best meet the specific needs of the nodal power markets.”

 

Since its launch in April 2009, all Nodal Exchange contracts have been cleared by LCH.Clearnet Limited (“LCH.Clearnet”). Nodal Exchange contracts will continue to be cleared by LCH.Clearnet until a transition to Nodal Clear is completed. This transition is planned for fall 2015 pending regulatory approval of Nodal Clear.

 

“Nodal Exchange and LCH.Clearnet have enjoyed an excellent working relationship over the last seven years and we are looking forward to continuing to work together through the transition,” said Mr. Cusenza. “We are committed to ensuring a smooth migration for the market.”

More about Nodal here: http://www.nodalexchange.com/about_nodal/overview.php