Release: 4540-01
For Release: July 11, 2001

CFTC Approves First New Derivatives Clearing Organization Not Affiliated with a Trading Facility

Washington DC - The Commodity Futures Trading Commission (Commission) announced on Monday, July 9, 2001, that it approved the application of EnergyClear Corporation (EnergyClear) for registration as a derivatives clearing organization (DCO) under the Commodity Exchange (Act). This is the first new DCO that is not affiliated with a trading facility to be granted registration by the Commission since the passage of the Commodity Futures Modernization Act of 2000 (CFMA) last December. DCOs for the existing futures exchanges were grandfathered in under the CFMA and the Commission has previously approved DCOs affiliated with OnExchange Board of Trade, Inc. and Brokertec Futures Exchange.

EnergyClear, headquartered in Houston, Texas, will provide clearance and settlement services for over-the-counter energy derivatives contracts executed on commercial markets exempt under section 2(h) of the Act. Transactions cleared will be executed only between eligible commercial entities that are EnergyClear members acting on a principal-to-principal basis. Contracts initially eligible for clearing involve electricity, natural gas, and telecommunication bandwidths. EnergyClear Operations LLC will perform certain self-regulatory functions for EnergyClear.

Copies of the Commission's letter granting registration and other supporting material prepared by Commission staff may be obtained by contacting the Commission's Office of the Secretariat, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5100.

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