NYMEX/LCH.Clearnet tie-up to offer margin savings

LONDON, May 9 (Reuters) - The New York Mercantile Exchange (NMX.N: Quote, Profile, Research) aims to offer traders in energy futures scope to reduce margin payments via its alliance in Europe with UK-based clearing firm LCH.Clearnet.

"We expect a full cross-margining agreement between NYMEX and LCH.Clearnet," Samuel Gaer, chief information officer of NYMEX told reporters at a briefing on Friday.

LCH.Clearnet and NYMEX announced a tie-up in March that will allow NYMEX to offer a range of contracts for clearing through LCH.Clearnet, including West Texas Intermediate crude, Brent crude, gas oil, natural gas and electricity.

They will be listed for trading on CME Globex electronic trading system and NYMEX ClearPort.

NYMEX aims to expand its European business via the alliance and the contracts are due to start trading and clearing in June or July pending regulatory approval.

Gaer said traders will be able to save money from the cross-margining facilities the new system will offer.

Traders will receive a credit, for example, if they had paid a margin for a position on NYMEX in New York and then opened a position on the LCH NYMEX system, he said.

When asked whether market regulators would be concerned by cross-margining, Gaer said that regulators wanted to look at it.

"It will be very compelling if you have large positions," he said.