Concero:  The OTC Derivatives Clearing Platform

The Clearing Corporation’s "Concero" platform significantly enhances credit risk-management and counterparty settlement services through CCorp's central counterparty (CCP) facilities for commercial and institutional users of the OTC energy, foreign exchange, and financial markets.  Specifically, Concero enhances traditional CCP services by offering:

·          Freedom to choose non-exchange execution venues such as bilaterally negotiated and voice or electronically brokered transactions and submit them for clearing;

·          Lower transaction costs and greater capital efficiencies due to bilateral position offset, portfolio margining and re-use of collateral;

·          Seamless straight through processing of related derivative and cash market transactions;

·          Flexible capture of OTC-style trade details;

·          Risk management and mark-to-market methodologies that extend beyond futures style variation margin;

·          Broader functionality such as confirmation and billing services for OTC and cash market products.

In certain instances, Concero allows market participants to execute the products on multiple marketplaces and realize the efficiency of a single CCP for risk and collateral management.  Furthermore, Concero services do not impact CCorp's existing futures market clients. In addition, many of the Concero services are available using existing communication links and is transparent to customers.

The technology behind the Concero clearing services platform derives from advances in CCorp's industry-leading clearing and trade management technology, including the globally deployed onExchange ECS clearing system. CCorp has used Concero to launch a number of new cleared products beginning in 2005, both as independent CCorp initiatives and also in partnership with marketplace sponsors.