HIGH LEVEL ENTERPRISE MODEL
CLEAR CO
NORDPOOL NORDPOOL
(8-10 Clearing)
Nos (6 persons)
<Table>
<Caption>
Commerical Settlements
Design Clearing Billing & Risk Finance
Prod & Service Strategy & Customer & Trading Payments Management & Banking
Development Management Acquisition Operations EBPP & Compliance Operations
- -------------- ---------- ------------ ---------- ----------- ------------ ----------
- infrastructure/service ops 50% of total costs.
o Physical o Regulatory o Marketing o Contract o Settlements o Margin o Balancing
Netting Neutralization
o Financial o Participant o Sales o Invoicing
Market Rules o Settlements o Collateral
Analysis o Competitive Netting o Collections Handling
o Contract Analysis
Specs o Trade o Margin
Acknowledgement Management
o Banking
Agreements o Scheduling o Insurance
o Services o Contract
Pricing & Warranties
Contracts
<Caption>
Service Shared
Management Services
- ---------- --------
o Acct Set-up o Accounting
o Acct Mngt o Finance
o Disputes o Legal
Resolution
o HR
o Services
Payment o Training
</Table>
"Customer" Services Process Handling & Call Center Operations - Integrated
Processes & Systems Required
Techn Infrastructure & Svcs; Facilities Management/Operations; Sys Integr;
Application Dvlp't; Networks, Help Desk
- -- Data Warehousing & Data Analysis Operations --
previously had infrastructure to Financial markets
NP
- ---
- - Marketing
- - Exchange
- - Clearing Department
PCS
- ---
trade collection
margin calculation
settlement
banking arrangement
trading systems from OM
remaining shaped around
risk mgmt svcs; sys ops; sys spt
[ILLEGIBLE] MODEL: Nordpool running physical & financial market
NORDPOOL is the
counter party]
60-80 people
98 members
11DTwh or
11Bnk [ILLEGIBLE]
$1.3Bn risk
value of all trading
positions to settle
margins in 1.5 Bn [ILLEGIBLE]
- -2.5 Bnk w/highest
margin % of 15%
volatility of market
[ILLEGIBLE] principally by weather
[ILLEGIBLE]
in addition to margin above
members must put entrances
margin of approx
150,000 [not mutual
risk - individual risk]
Clearing Co is Limited Company
[ILLEGIBLE] 50/50 by Norwegian & Swedish gov'ts
DAILY MARKET (NORDPOOL - Norway, Sweden, Finland, Denmark)
- ------------
[ILLEGIBLE] 16% market is spot market - want to settle whole until prices known
[ILLEGIBLE] 4x Finance Trade - value of contracts volume $200 m or $30m USD
Norway/Sweden x 250 Twh - equals approx Calif
[Net equity; margins; member capital; insurance
N Amer approach: 1st member's capital : member capital
(line of defense) 2nd members group margin : guarantee
3rd underwriter : mutual fund
: CH own capital