EU ETS New Entrant Reserve - oversized?
- Category: Emissions trading
Serious concerns that New Entrant Reserve (NER) will be used-up early and not sufficient to cover the needs of new entrants to the EU ETS, as well as installations' capacity increases, occur not to materialise.
NER is governed by the rule "first come, first served", hence the threat was, in principle, grounded.
However, as follows from data published recently by the European Commission, until July 2015, only 91.3 million allowances have been reserved for 369 installations for the entirety of phase 3 (i.e. untill 2020) and expectations are a significant number of allowances from the NER will remain unallocated.
Permanent/occasional trade character decisive for RRM designation in complex delegation chains
- Category: REMIT
Establishing circumstances where the RRM designation by the wholesale energy market participant is required, and where it is not, is almost entirely governed by ACER's frequently changing interpretations.
This is not a comfortable situation from legal certainty point of view. If these interpretations were a little bit clearer...
CCP-cleared trades terminated - not modified (in EMIR reports)
- Category: EMIR
Where an existing contract is subsequently cleared by a CCP, it mustn't be reported under EMIR to the trade repository as a modification of the existing contract, but the original contract should be flagged as terminated and the new contract resulting from clearing should be reported.
This is the essence of ESMA's recent draft amendments with respect to EMIR reporting of derivatives subject to clearing.
It will be also expressly stipulated by the law that when a contract is concluded in a trading venue and cleared on the day of execution, only its cleared form will be reported.
Brokers as reporting agents under REMIT
- Category: REMIT
Brokers role in the REMIT reporting framework appears somewhat complex. Let alone entirely different structuring of executing brokers and the clearing ones (where the clearing brokers have been placed - fundamentally - outside the REMIT market participants' scope), the reporting of life-cycle events with respect to trades executed with the broker's participation requires a careful reflection.
Another problematic case emerges when the firm has two different types of business - is an executing broker (exchange member) and is also an organised market place (it runs a broker platform). Recent updates to the ACER's reporting manuals offer some help while resolving these issues.
REMIT reporting - derivatives traded in the EU with a delivery outside the EU
- Category: REMIT Reporting Database
From the group of derivatives of contracts related to electricity/natural gas (a) produced, (b) traded or (c) delivered in the European Union, only those that also relate to the supply of electricity/natural gas with delivery in the European Union are reportable under REMIT.
MiFID II position limits regime - be mindful of EEOTC (Economically-Equivalent OTC Contracts)!
- Category: MiFID
Among multiple issues involved with applying MiFID II position limits the most prominent appears that there is no ex ante certainty on whether contracts are recognised as EEOTC before entering into transactions.
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