Natural Gas Exchange Inc. (NGX), a wholly-owned subsidiary of TMX Group, today announces that its derivatives clearing organization (DCO) is clearing all NGX energy products as futures contracts under U.S. regulations. Changes to the regulation of exempt commercial markets (ECMs) resulting from the Dodd-Frank Act for the first time require identification of NGX's contracts as either futures or swaps. Clearing its energy products as futures contracts under U.S. regulations ensures NGX's continued compliance with U.S. requirements and brings Canadian and U.S. regulation into alignment.
"NGX remains focussed on providing fair efficient markets that ensure a level playing field, best price execution and the benefits of central counterparty clearing," said Peter Krenkel, Chief Executive Officer of NGX. "We believe this clarification retains current liquidity and serves the important goal of eliminating regulatory uncertainty for our customers."
Subject to regulatory approvals, NGX anticipates registration as a Foreign Board of Trade by the end of 2012, replacing NGX's current ECM status. NGX plans as an FBOT to continue clearing contracts as a DCO. NGX will continue to clear futures contracts traded on NGX as well as clearing futures contracts in energy products under its exchange-for-physical and exchange-for-swap rule. For more information on U.S. classification of NGX products please visit www.ngx.com.
NGX provides exchange, delivery, clearing and settlement services to over 250 energy trading customers in North America. In 2008, NGX launched an alliance with IntercontinentalExchange Inc. (ICE) whereby NGX uses ICE front-end trading technology. NGX currently offers products and clearing services at over 65 natural gas, crude oil and power locations in North America.
