CFTC Issues Amended Registration Order for Natural Gas Exchange Inc.

The CFTC issued an amended order of registration as a derivatives clearing organization ("DCO") to the Natural Gas Exchange Inc. ("NGX"). NGX, a registered DCO since 2008, had requested that the CFTC expand the scope of products which NGX is authorized to clear and to permit it to continue using an accrual accounting methodology for daily settlement.

The amended order of registration permits NGX to clear:

(i) physically delivered or financially settled contracts (futures or swaps) based on energy products that could qualify as exempt commodities traded on or subject to the rules of a registered foreign board of trade; and (ii) physically delivered or financially settled swaps based on energy products that could qualify as exempt commodities and which are traded bilaterally on, or subject to the rules of, a designated contract market or a registered swap execution facility.

Under its amended order of registration, NGX is permitted to continue using an accrual accounting methodology to calculate settlement of variation adjustments to collateral, rather than using a daily payment and collection model.

The amended order of registration supersedes the original order of registration.

See: NGX Amended Order of Registration as a DCO.