Energy brokers form their first trade association

Seven of the largest US over-the-counter energy brokers have formed a trade association with the aim of enhancing the struggling energy trading markets.

The Energy Brokers Association (EBA) – the first such initiative in the competitive world of OTC energy brokers – will work with industry participants to address financial, regulatory and operational issues. The founding members of the association make up a large share of the brokered electricity, natural gas and oil markets in North America. They are Amerex, APB Financial - currently being bought by Icap - GFI Group, Natsource, Prebon Energy, Starsupply and TFS Energy.

Chris Edmonds, vice-president of market development at APB and the first president of the EBA, told Risk News in an exclusive interview that the association was formed in response to the chaos on the energy trading markets during the past year. “The association will work with regulators, industry players and others to encourage companies in the market to adopt the highest standards of operation,” he said. “It’s also crucial for us to define the value which brokers bring to the market.”

The EBA is encouraging other companies involved in the OTC energy broking market to join, providing they conform to certain unreleased organisational, financial and operational requirements. The association also has an associate membership category for companies in related energy businesses or which do not meet the EBA’s requirements for full membership. Initially a US initiative, it may be opened to international brokerage companies in the future, according to Edmonds.

EBA (www.energybrokersassoc.org) is registered as a trade association in Washington DC - where it will be based. Its first annual meeting is scheduled for July 15, 2003. It will add a dedicated staff over time but initially will be run from the offices of its member firms, Edmonds said.