EEX Charta

European Energy Exchange offers spot and derivatives trading regarding power, gas, emission allowances and coal. Settlement of the transactions is ensured by an independent clearing house – ECC AG, an EEX subsidiary.

With more than 200 trading participants from 20 countries the European Energy Exchange which emerged as the result of the merger between LPX Leipzig Power Exchange and the Frankfurt-based European Energy Exchange in 2002, is the most important energy exchange in continental Europe today. As regards the intensity of growth and the speed of expansion, it has now become the leader in Europe. It is a fully regulated exchange and can truly lay claim to the title “European exchange“ since a large majority of its trading participants are based in other European countries.

EEX relies on the model of generating more flexibility, a higher market coverage and increased volumes through spin-offs and partnerships in order to establish its position as Europe’s leading exchange for energy and related products in the long run. The power spot trading company of EEX was spun off into an independent company - EEX Power Spot GmbH – in 2007. In 2008, the Derivatives Market for power will also be spun off into an independent subsidiary – EEX Derivatives Markets GmbH. Both subsidiaries, which will be wholly owned by EEX at first, are open for co-operations, investments and partnerships of various characters.

On every exchange trading day, auctions and continuous trading for power – with delivery in Germany, Austria and Switzerland on the next day – take place on the Spot Market. In September 2006, EEX launched intra-day trading, which takes place around the clock. In this case, the trading participants trade hourly deliveries of power up to 75 minutes before the beginning of the hour concerned.

On the Spot Market, natural gas is traded for the next day and the next but one day. On every exchange trading day, continuous trading of natural gas day contract takes place for the E.ON GT and BEB market areas. Spot trading in the EGT market area will be launched in October 2007.

Emission allowances can also be traded on the Spot Market.

As of 2008, the Derivatives Market for power will be spun off into EEX Derivatives Market GmbH, a wholly owned subsidiary of EEX AG. Contracts which are fulfilled with a time horizon of up to six years into the future are traded here. The confidence which the traders place in the Derivatives Market of EEX is substantiated by the increase in its open interest. In December 2006 the open interest amounted to 300 TWh – power with a total value of EUR 17 billion.
With European Commodity Clearing AG (ECC) - a subsidiary of EEX AG which was spun off in 2006 – EEX has a clearing house safeguarding a secure and professional settlement of the transactions. In this process, ECC also takes into account the effect to reduce the total of the margins to be furnished (e.g. cross-margining).

Vision
The European Energy Exchange (EEX) intends over the medium term to become the first choice trading and clearing platform for all products along the energy added-value chain, and to establish itself permanently in this capacity.

Objective
EEX declares its goal to be growth along three vectors: regions, products and market segments. Our motto: ‘Connecting Markets’.

Profile and position
Power plant operators, energy suppliers and distributors, traders, wholesale customers, banks, brokers and investors – all these use EEX as a market place to buy and sell power, CO2 emission allowances, coal and, in the future, natural gas at fair market prices, to meet their needs and manage their risks. Today, more than 180 companies from 20 countries trade on the EEX.
Established in 2002 through the merger of the two original German energy exchanges, the European Energy Exchange AG (EEX) today boasts the strongest growth rates in terms of trading volume, sales revenue and yields of all energy exchanges. It also boasts the largest number of participants and the highest level of internationalisation in Continental Europe. This means that EEX is well on the way to becoming t h e European energy exchange – after having started out five years ago as a local exchange for power. Besides the constantly growing number of participants and the constant growth in trading volume, EEX’s high profile is also reflected in the fact that prices established on the exchange are used across Europe as reference.

Principles
The basic principles of company management and of running the exchange comprise:

Liquidity
Liquidity is the precondition of fair market relations. Liquidity means high trading volumes, a large number of market participants, and thus fair and reliable price formation. A tangible indicator of liquidity is a small spread between sell and purchase prices.

Security
A closely-meshed net of control and security comprising supervisory authorities at regional and federal levels and countless voluntary security standards ensure that EEX is one of mainland Europe’s most secure energy exchanges.

Transparency
Transparency is the indispensable precondition for gaining participants’ trust in the market, and thus constitutes the basis of all trading on exchanges. Equal and overt conditions of trade constitute the basis for equality of opportunity of all participants.

Equal treatment
EEX is convinced that a liberalised market is an open market. Openness is crucial to equality of opportunity. Ensuring equal trading conditions for all participants guarantees fairness of trading, and is the key to prosperous development.

Simplicity
All requirements and processes are designed to be as streamlined as possible, in order to open the EEX market places to as broad a public as possible. EEX regards itself as a service provider for its customers, and therefore wishes to avoid all unnecessary obstructions to trading.

Cost efficiency
Simple procedures and low financial requirements are the key components of the cost-effective trading that EEX wants to provide for its customers. This is reflected, for example, in low fees and the abolition of admission charges.

Development step-by-step
EEX is convinced that successful positioning on the market is the result of a step-by-step approach. Each development step thus follows on logically from the previous one.

Collaborative development
EEX develops energy exchange in close collaboration with all interested market participants. A shared approach is important for EEX, because market participants should derive advantage from use of the market place. New working groups for all product segments and expanded working groups at the European level highlight the extent to which EEX is committed to collaboration.

Multi-dimensional diversification
EEX regards itself in the long-term as an integrated energy exchange of European standing. Diversification is set to encompass markets, products and regions. EEX will focus on its strengths, while integrating its partners.

Pan-European networking
EEX regards itself as an integral part of a pan-European network of energy exchanges. This network pays homage to the European federal ideal and harnesses regional competences. At the same time, EEX prevents the market being flooded by disparate systems and processes.