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Nymex Tops The $1 Billion Mark In Over-The-Counter Clearing Activity

Date 22/10/2002

The New York Mercantile Exchange, Inc., today announced that it has cleared more than $1.1 billion worth of over-the-counter (OTC) deals in natural gas and electricity, equivalent to 294 trillion British thermal units of natural gas and 118,400 megawatt hours of electricity.

Clearing services for OTC energy products were introduced on May 31. All numbers are through October 21.

Open interest as of the close of business on October 21 was valued at approximately $725 million.

"We are gratified by the energy industry's response to our OTC clearing initiative," said Exchange President J. Robert Collins, Jr. "It is a strong indication of the industry's concern over counterparty credit ratings in the current business environment and a recognition of the Exchange's reputation as a safe haven from the risk of counterparty default."

OTC clearing allows energy market participants the flexibility of negotiating their own deals and submitting them to the Exchange clearinghouse through a website with the clearinghouse guaranteeing performance. The Exchange also nets the positions of cleared OTC and Exchange transactions to determine margin rates reducing costs and improving cash flow. In order to participate, market participants must have an account with an Exchange clearing member.