El-Certificates for the joint Swedish-Norwegian market

NOS has been offering clearing of Swedish El-Certificates from February 4^th 2010. With introduction of the joint Swedish-Norwegian El-Certificate market from January 1^st 2012, NOS Clearing has expanded the service and offers clearing of El-Certificates for the joint market in both EUR,SEK and NOK.

Following the NOS acquisition by NasdaqOMX, the Swedish-Norwegian El-Certificate instruments will continue to be offered by NOS Clearing ASA in close co-operation with NASDAQ OMX Commodities Europe until the integration is complete.

The El-Certificate contracts are physically settled forwards and spot contracts.

The contracts are offered through the following OTC brokers:

• Cleanworld AS
• ICAP Energy AS
• Svensk Kraftmäkling AB (SKM)
• STX Services B.V.

The trading, clearing and settlement cycle is briefly as follows:

• New forward trades during the day are added to the clearing member’s portfolio and piled according to the traded currency.
• At end of day the closing is set in SEK for each product, based on SKM closing prices.
• Currency rates are fetched from the European Central Bank (ECB) and used for calculating closing in EUR and NOK.
• Unrealised profit and loss for the position is calculated per currency.
• Margin is calculated in SEK for the total portfolio. The margin requirement can be covered in cash in the preferred currency, bank guarantee/Letter of Credit or physical Elcerts.
• On settlement day the system calculates:
  • Cash settlement for net positions in SEK, EUR and NOK respectively.
  • Net amount of certificates to delivery.

Being a member of NOS is free of charge. The only costs are transaction based clearing and delivery fees, and account management fees with DNB and the registers.

New and current clearing members can also submit existing bilateral positions for clearing.

The NOS clearing service gives the market participants several benefits:

• Guaranteed settlement and delivery of the certificates
• Elimination of credit assessment of counterparties and valuation of receivables
• Handling of physical deliveries in Cesar and NECS
• Use of certificates as collateral
• Simplified back-office routines and integration with back-office systems
• Effective book-keeping, single counterparty, single account, single cash flow per currency
• VAT (Mva) handling
• Reports and risk management control through systems offered by NOS
• Anonymity