By the OGJ Online Staff
HOUSTON, Dec. 12 -- The New York Mercantile Exchange said Wednesday it acquired a Houston company to provide electronic confirmation of energy trades for its clients.
During a meeting with Houston energy reporters, Exchange Pres. J. Robert Collins Jr. declined to provide additional details of the acquisition of privately held Confirmation Clearing Corp., which was finalized Tuesday.
Chris Papousek, president, founded Confirmation Clearing in September 2000 to transmit electronic data to match instantly details of price, quantity, and other terms of energy trades between parties.
Formerly with Texas Utilities Corp.'s energy trading arm, Papousek stepped out on his own by designing a process for electronically comparing data files generated by both participants in a trade to ensure that all of the details match or else pinpoint any discrepancies. As a result, the trading parties are able to iron out potentially costly errors that otherwise might not become evident until some future settlement date, he told OGJ Online.
The process is much faster and more accurate than the prevalent system of faxing data between parties, said Collins. NYMEX became interested in Confirmation Clearing when it "approached some of our clients," he said.
Through the acquisition, Papousek joined NYMEX as managing director of its over-the-counter (OTC) services.
NYMEX plans to expand that operation to provide more "back office" services to clients. That will permit more small companies to participate in energy trading with less cost or staff additions, said Collins.
He said NYMEX also will expand its measures for credit intermediation through clearing services and trading tools for more OTC energy offerings, beginning with expansion of natural gas in the first quarter of 2002.
As a first step, NYMEX last month began offering exchange of futures for swap transactions in the OTC natural gas market.