Emission Alliance

EEX and Eurex Join Forces in CO₂ Trading

Since December 2007, EEX and Eurex have been successfully cooperating in emissions trading. The alliance combines EEX’s energy market membership and connectivity to the European power trading community with Eurex’s financial market membership and global distribution network. Optimized trading and clearing processes set new standards with respect to market efficiency in emissions trading.

Under the cooperation, the following products are available for exchange trading and OTC clearing:

Products	Product ID	Introduction
EUA Futures	F2PE	December 5, 2007
CER Futures	FCER	March 26, 2008
Options on EUA Futures	O2PE	April 14, 2008

The Alliance contributes to the expansion and diversification of the global emission market and bears powerful advantages to the rising number of participants for trading and clearing of emission products.

Benefits for Market Participants
By joining forces, EEX and Eurex offer significant advantages to professional traders and to potential new participants in the global emissions market:

Global Network
With a joint member base of about 600 trading participants, the cooperation opens up the most comprehensive and global distribution network for emissions trading, resulting in increased liquidity, improved market quality and transparency.

Easy Access
Emission products in the EEX/Eurex cooperation are traded through the Eurex® system. With the “plug & play” setup, Eurex participants are able to trade EEX CO2 products via their existing setups at minimal cost. Eurex members can access the EEX order book for emissions trading through a streamlined admission process.

Front-End Alternatives & Order Routing
The cooperation supports EEX and Eurex proprietary front-ends as well as all major ISV front-ends and all existing order routing systems. Furthermore, members can access the market through a connection via Trayport Global Vision^TM.

Financial Market Standards
The EEX/Eurex cooperation provides fully integrated and efficient trading and clearing for exchange traded contracts as well as for over-the-counter (OTC) transactions based on established financial market standards.

OTC Block Trade Facility
Members are able to enter bilaterally agreed OTC transactions into the trading and clearing system. Registered OTC trades are then automatically cleared like regular exchange transactions.

The block trade entry facility is fully electronic and there are no size restrictions on block trades in EEX/Eurex cooperation products.

Choice of Clearing
Trades in EEX/Eurex cooperation products can be cleared by both Eurex Clearing AG (ECAG) European Commodity Clearing AG (ECC). Physical settlement is carried out by ECC, a specialized Clearing House experienced in the physical delivery of commodities.

Cross Margining
The Clearing Houses offer cross margining for CO2 derivatives, such as EUA Futures and CER Futures. The offsetting of opposing risks allows for the significant reduction of margin requirements while retaining the necessary security. Inherent benefits for members are decreased cost of capital, increased liquidity availability, improved collateral management and lower operational costs.

Fast Physical Settlement
ECC offers fully electronic and integrated delivery management for spot and derivatives transactions with the fastest delivery process for emissions in today’s market environment.

EUAs can be transferred to any eligible European registry account whereas CERs can be transferred to any eligible registry account worldwide.

About EEX

European Energy Exchange (EEX) offers spot and derivatives trading on power, natural gas and emission rights. In addition, the exchange lists financial coal derivatives contracts. Secure settlement of the transactions is ensured by an independent Clearing House - the EEX subsidiary ECC AG.

With more than 200 trading participants from 20 countries, the European Energy Exchange is the fastest growing and most important energy exchange in continental Europe today. It is a fully regulated and a truly European exchange, since a large majority of its trading participants are based outside of Germany. The full regulation of EEX ensures the highest possible degree of transparency, which in turn allows for calculation of reference prices for Germany and the rest of Europe.

In order to protect and further expand its position as leading exchange for energy and related products in continental Europe, EEX continuously expands its product offering for European market players and is open to European partnerships and financial investments. The 2007 spin-off of the power spot market into EEX Power Spot GmbH clearly shows its readiness to enter into new partnerships, which are intended to guarantee more flexibility, volume and higher market coverage in the long run. In 2008, all power derivatives market products will be spun off into EEX Power Derivatives Markets GmbH. Once both spin-offs fully implemented, the two independent subsidiaries, at first wholly owned by EEX, will search for appropriate co-operations, investments and partnerships.

About ECC

European Commodity Clearing AG (ECC) operates a Clearing House for energy-related commodities and their derivatives. Its vision is to become the Clearing House of choice for these products.

Currently, ECC provides clearing services for contracts traded on both the European Energy Exchange (EEX) and the European Energy Derivatives Exchange N.V. (ENDEX), as well as for over-the-counter (OTC) trades registered via these exchanges. Founded in 2006, ECC currently offers clearing services for the following commodities: German, French, Austrian, Swiss, Belgian and Dutch power, emission rights, coal, and natural gas.

ECC is constantly expanding its range of products, its clearing membership and its exchange partnership network.

Its automated and integrated clearing and risk management services, across a range of markets and commodities, allow ECC to standardize processes and lower collateral requirements, providing members with cross-commodity and cross-currency clearing at a reduced cost.

ECC operates within a robust and international corporate governance structure according to internationally recognized standards for capital markets, institutions and Clearing Houses. ECC is supervised by the German Federal Financial Supervisory Authority (BaFin) and is a designated Payment System according to Article 10 of the Settlement Finality Directive 98/26/EC.

As central counterparty, ECC, which occupies a central and independent role within the marketplace, steps into every single trade that takes place on the exchange. Protection against default is provided by an internationally approved margin system and a default fund. Buyers and sellers are also guaranteed complete anonymity at each stage of the transaction.

About Eurex

Eurex is one of the world's leading derivatives exchanges and is jointly operated by Deutsche Börse AG and SWX Swiss Exchange. Eurex offers a broad range of international benchmark products and operates the most liquid fixed income markets in the world, featuring open and low-cost electronic access. Eurex has an integrated Clearing House in the form of Eurex Clearing AG.

Eurex's extensive range of products includes some of the world's most heavily traded derivative contracts such as the fixed income futures Euro-Schatz, Euro-Bobl and Euro-Bund Futures. Moreover, Eurex is the leading exchange for trading in European equity options; more than 550 Single Stock Futures cover the range of equity derivatives. With market participants connected from 700 locations worldwide, trading volume at Eurex exceeds almost two billion contracts a year. Therefore, Eurex is the market place of choice for the derivatives community worldwide.

For more information on Eurex visit http://www.eurexchange.com/about_en.html

About Eurex Clearing

Aside from operating a fully electronic trading platform, Eurex provides an automated and integrated joint Clearing House. Eurex Clearing AG acts as the counterparty for derivatives, equities, bonds, and repo transactions traded at major international exchanges and trading platforms, eliminating the individual counterparty risk. The benefits are clear - use of Eurex Clearing AG virtually eliminates credit and counterparty risk, which reduces the overall trading costs for all our customers.

When a trade is executed in connected markets, Eurex Clearing AG stands between the buyer and seller as Clearing House for, and counterparty of, both contractual partners. The Clearing House enables the parties of the transaction to make further decisions fully independent of each other and limit counterparty risks to a single contractual partner.

The clearing system of Eurex Clearing AG, with its integrated safety and control mechanisms, thus guarantees fulfillment of every contract executed on connected platforms.

With this structure, Eurex participants benefit from a high-quality, cost-efficient and comprehensive value chain of trading and clearing services via a single electronic system.

For more information on Eurex Clearing AG visit http://www.eurexchange.com/clearing_en.html