© Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved.
UK FINANCIAL FUTURES SOLUTION FOR
SECURE AND PROMOTE OBLIGATED PARTIES
NASDAQ OMX AND N2EX
MILESTONES SINCE 2010
Secure and Promote solution next step for remodeling of UK Power
Market
N2EX Auction now firmly established as UK Benchmark
Volumes to reach 140 TWh cleared on the Auction
Daily volumes at 50% of UK Generation
Membership to reach 45 by year end
UK Futures successfully launched in 2011
Volumes remain low with slow general uptake of Clearing in UK
Contracts have been traded by over 20 distinct counterparts
Gregorian Calendar, Cash settled versus Auction, automated give-up of
Broker trades through Clearing Gateway, no requirement for BSC status
or GTMA setup
Market Maker Supervision software immediately available – automated
reporting
2
Daily Auction Volume since launch in Jan 2010
-
3
Now touching 500GWh per day
True benchmark capturing upto 50% of Day Ahead Generation
NASDAQ OMX - UK FUTURES PRODUCT STRUCTURE
Ticker Code: EUK
Electricity UK
BASE: 5 week (168 h), 4 Month (e.g. 744 h), 5 Quarter (e.g. 2209 h), 5 Season (e.g. 4380 h)
PEAK: 5 week (60 h), 4 Month (e.g. 264 h), 2 Quarter (e.g. 780 h) – Peak Seasons to be added during Q1 2014
Weeks
W
Months
OCT
Quarters
W
W
W
NOV
W
Note: Seasons are cascaded to quarters, and quarters to months.
JAN
DEC
Q4
Q1
01.10 - 31.12
Seasons
4
FEB
01.01 - 31.03
MAR
APR
MAY
JUN
JUL
AUG
Q3
Q2
01.04 - 30.06
01.07 – 30.09
WS
SS
01.10 – 31.03
01.04 – 30.09
Winter Season (WS)
Summer Season (SS)
SEP
UK FUTURES CURRENT
STATUS AND READINESS FOR
SECURE AND PROMOTE
Existing Market Makers and MM contract structure in place
for UK Power Futures
Tried and tested technology used extensively in Nordic
Equity and Derivative Markets
Existing members to have immediate access to service
20+ live participants, 300+ NOMX Commodities Members
5
GCMs have confirmed their ability to provide access to
functionality for NCMs
Attractive fee solution in tandem with Secure and Promote
introduction
© Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved.
MARKET MAKER SUPERVISION – MMS
SOFTWARE SOLUTION FOR S&P
NASDAQ OMX Market Making
Software:
MMS: Market Maker Supervision
7
NOMX’s Market Maker Supervision (MMS) software is a
proven system – in use globally across multiple asset
classes.
MMS is embedded within the trading system which allows
for real-time feedback to MM’s in the event of failing
obligations
MMS can support a range of obligation parameters including
Fast Market rules (as a parallel obligation rule set).
MMS’s stated functionality in this document is already in use
and deployable to NASDAQ’s UK Power offering
MEETING THE OBJECTIVES OF SECURE AND PROMOTE:
ALL OBLIGATIONS CAN BE MET BY MMS AND THE TRADING WORKSTATION
8
Requirements in Detail:
9
B1 – Nominating a third party
NOMX can facilitate a third party MM to access the
NOMX trading platform
We await interest from suitable providers
B2 – Platform
NOMX meets the requirements for a GB wholesale
electricity market trading platform – 17 Licensed
Suppliers with access + Over 300 Commodities
Members
B3 – Products
All products already listed except Seasonal Peaks
which will be live before Secure and Promote
implementation
NOMX MARKET MAKER
SUPERVISION
B4 – Availability
MMS has the ability to monitor all parameters and can
handle multiple parameters for each MM or subsets
MMS can support any time period of required
obligation, both the % of time quoiting and the
obligation window.
B5 – Bid offer spreads
NOMX can support both percentage and flat price
spread solution
B6 – Obligation to trade
The NOMX trading platform requires that any ‘hit’
quotes are tradable.
B7 – Trade size
MMS can configure minimum trade size
APPLICATION TO OFGEM’S
S&P
10
NOMX MARKET MAKER
SUPERVISION
ALARMS AND REPORTS
AUTOMATION - AIM TO SIMPLIFY THE REPORTING
FUNCTION FOR ALL OBLIGATED PARTIES:
If MM Obligation is breached it is possible to configure MMS
so that:
An alert is sent to the market maker
MMS produces Obligation fulfillment reports at end of day to
verify performance of the S & P requirements:
Reporting can be automatically sent to the obliged Market
Maker and/or Ofgem as required
11
NEXT STEPS:
TOWARDS SECURE AND
PROMOTE – MARCH / APRIL
2014
12
NASDAQ OMX to meet with all obligated parties during Dec
and Jan
Set out the technical delivery and describe access process
Offer Annual Market Making contract with associated fee
rebate
Aim to sign up interested parties during Q1 2014 and
announce roster of MMs to NOMX membership before S&P
Go Live
© Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved.
THANK YOU
