Dear Trading Participants,
Yesterday's meeting of the Energy Ministers brought forward a political agreement on the so- called Market Correction Mechanism, which will enact a framework for a gas derivatives price cap. The mechanism is expected to apply as of 15 February 2023. For more information please consider the Councils press release of 19 December 2022.
EEX has consistently voiced its concerns about the mechanism and continues to be concerned about the implications of such a price cap on the markets. This information is subject to final wording of the regulation which we will analyze as soon as it is published.
Impact on Trading and Trade Registration at EEX Regulated Market
Upon activation of the price cap, EEX will no longer permit the order entry or trade execution for affected contracts above the cap, except in certain exception cases outlined in the Market Correction Mechanism regulation. Trading participants shall not enter orders exceeding the imposed price cap. Any exceeding orders (and trades) will be cancelled.
Impact on Settlement Price Procedure of EEX
The EEX Settlement Pricing Procedure applies without changes. This means that settlement prices will continue to reflect the fair market value.
Impact on Clearing & Settlement at ECC AG
The proposed market correction mechanism is a significant intervention in the transparent and reliable price formation procedure of trading venues and might have impact in the way CCPs’ calculate their margin requirements or perform their default management.
Further information will be provided by EEX and ECC in due course. Concrete questions will be answered via the established Q&A on EEX and ECC Website.
The European Energy Exchange (EEX) is the leading energy exchange in Europe which develops, operates and connects secure, liquid and transparent markets for energy and related products. As part of EEX Group, a group of companies serving international commodity markets, EEX offers contracts on Power, Natural Gas and Emission Allowances as well as Freight and Agricultural Products. EEX also provides registry services as well as auctions for Guarantees of Origin, on behalf of the French State. www.eex.com
European Commodity Clearing (ECC) is a central clearing house which specialises in energy and commodity products. ECC assumes the counterparty risk and guarantees the physical and financial settlement of transactions, providing security and cross-margining benefits for its customers. As part of EEX Group, ECC provides clearing services for EEX, EEX Asia and EPEX SPOT and for the partner exchanges HUPX, HUDEX, NOREXECO, SEEPEX and SEMOpx. For more information,
please visit www.ecc.de.
EEX Public Relations
T +49 341 2156-216
firstname.lastname@example.org | www.eex.com