New York, NY,
30 November 2000 - The Bank of New York, Prebon
Yamane and Amerex today announced the formation of EnergyClearTM,
a joint venture that will create the first industry-sponsored
clearinghouse to offer comparison, netting and settlement
of wholesale energy contracts for the over-the-counter
(OTC) marketplace. It is anticipated that EnergyClear
will initially offer its services to participants in
the wholesale power and natural gas markets as early
as the spring of 2001. In the future, EnergyClear anticipates
servicing contracts for other OTC commodities such as
crude oil, petroleum products, petrochemicals and bandwidth.
The Houston-based clearinghouse will
provide services independent of price discovery. OTC
energy contracts are presently negotiated on a principal-to-principal
basis, through electronic exchanges or via interdealer
brokers over the telephone. Counterparties currently
settle their trades under bilateral agreements, under
which each party is exposed to the risk that its counterparty
will fail to perform.
"EnergyClear will revolutionize the OTC
energy markets by reducing the credit, legal, operational,
and liquidity risks currently associated with transactions
in these markets. As a result, EnergyClear stands to
ultimately increase market depth and liquidity for its
participants," said Lee Burton, co-founder and recently
appointed President of EnergyClear Operations Company
and a 21-year veteran of energy markets trading.
EnergyClear’s target market includes
traders and risk managers of large power generation,
marketing and trading entities in the wholesale power
and gas market. Within the energy marketplace, electricity
is seen as having the potential to become one of the
largest traded commodities in the United States.
EnergyClear consists of two entities,
EnergyClear Corporation (EC) and EnergyClear Operations
Company, LLC (EOC). EC will be owned by leading energy
market participants, who will provide industry control,
oversight and rule making. The Bank of New York, Prebon
Yamane and Amerex will own EOC, and will provide and
manage the facilities and technology necessary for the
operation of the clearinghouse.
Art Certosimo, senior vice president
of The Bank of New York, explains, "EnergyClear’s dual
structure will allow the energy industry to own and
govern a clearinghouse without the prohibitive investment
that would otherwise be required to develop the necessary
infrastructure and provide ongoing support."
"The formation of EnergyClear reinforces
The Bank of New York's position as a leading provider
of clearing services worldwide and demonstrates our
commitment to expanding our capabilities to meet emerging
needs," added Mr. Certosimo. "Our state-of-the-art technology
and operational experience will allow EnergyClear to
quickly and efficiently clear and settle transactions,
thereby minimizing risk and maximizing performance."
Through the EnergyClear joint venture
Prebon Yamane and Amerex continue to serve as leaders
in the development of innovative solutions to enhance
liquidity and meet demands of power marketers, utilities,
producers, and institutions in a broad range of energy
markets.
Prebon Yamane
Prebon Yamane is a premier intermediary in a broad range
of over-the-counter foreign exchange, money, derivatives,
securities, energy and emerging markets and is a participant
in a number of B2B exchanges. Last year the Prebon Group
facilitated over 1.4 million transactions valued at
$55 trillion. The Prebon Group, which traces its heritage
back to the 1860s, employs 2,000 staff across a worldwide
network of 30 offices and provides clients with coverage
of all major financial markets throughout the trading
day. Additional information about the Prebon Group is
available at www.prebon.com.
Amerex
Founded in 1978, Amerex is a leading over-the-counter
energy broker, providing customers with voice and electronic
brokerage services, market liquidity, price discovery,
and data services around the globe. With over 200 employees
committed to the energy market needs of its institutional
clients, Amerex combines comprehensive energy market
experience with state-of-the-art technology and efficient
proprietary software systems. Amerex Power Ltd., established
in 1996, brokers in excess of 5.5 million megawatt hours
of physical electrical power and options on physical
power each day. More information on Amerex can be found
at www.amerexenergy.com.
The Bank of New
York
The Bank of New York is the leading provider of U.S.
government securities clearance services and handles
the transaction servicing and financing needs of international
banks and brokers through its Global Securities Clearance
service. The Bank of New York was founded in 1784 by
Alexander Hamilton and is the nation's oldest bank.
It is the principal subsidiary of The Bank of New York
Company, Inc. (NYSE: BK), a financial holding company.
With over $75 billion in total assets as of September
30, 2000, the Company provides a complete range of banking
and other financial services to corporations and individuals
worldwide through its basic businesses, namely, Securities
Servicing and Global Payment Services, Corporate Banking,
BNY Asset Management and Private Client Services, Retail
Banking, and Financial Market Services. Additional information
on the Company is available at www.bankofny.com.
EnergyClear is a registered trademark
of The Bank of New York
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