MiFID II emission allowances position limits – threefold means of regulatory influence
- Category: MiFID
It is interesting that the architecture envisioned has, in its primary form, a decentralised character i.e. the respective decisions on the introduction of positions limits are to be taken at the level of the trading venue. It is to be borne in mind that pursuant to MiFID II legislative design the above developments will also be relevant for commodity derivatives as well as emission allowances and derivatives thereof. Market strategies mustn’t neglect that fact.
Will forwards regarding banned ERUs be allowed in New Zealand Emissions Trading Scheme after the ban date?
- Category: CER, ERU
Among the options currently considered in public consultations no units entering the New Zealand Emission Unit Register after the ban date could be used to meet surrender obligations, regardless of forward contracts.
Main points of ACER’s 2nd Edition of Guidance on REMIT
- Category: REMIT
The company internal documentation and procedures on definitions of roles and responsibilities in the organisation (e.g. responsibilities for the REMIT requirements (centralised vs. decentralised), internal vs. external reporting lines, internal vs. external interfaces, provision of resources: human/technical IT Systems) resources), as well as the identification/assessment of concrete compliance risks will inevitable be in the first place the subject of the detailed scrutiny and examination of the relevant authorities in case of any suspected REMIT non-compliance.
 Best practice example of Urgent Market Messages UMM pursuant to ACER Guidelines, | [ ] | 29 kB |
Capacity markets vs. Internal Electricity Market – will State aid weapon be used?
- Category: Capacity Markets
Capacity mechanisms attempt to ensure that electricity undertakings (often suppliers) assume the responsibility to provide or pay for generation capacity which they would not otherwise do, or at least not to the same extent, considering only their own commercial interests. According to the European Commission’s stance it is possible that such a mechanism constitutes a public service obligation and involve State aid. The above notwithstanding, UK prepares for capacity auctions from 2014 for delivery of capacity in the winter of 2018/19, if needed.
Obligation to trade on regulated markets, MTFs or OTFs – new element of the emission market financial infrastructure
- Category: MiFID
MiFIR (Markets in Financial Instruments Regulation) will for the first time require certain derivatives contracts – those that are both cleared through a central counterparty (CCP) and deemed sufficiently liquid – to trade on a ‘trading venue’.
MiFID II exemption for EUAs compliance buyers – EP report of 5 October 2012
- Category: MiFID
Specific MiFID exemption has been designed for persons which own or directly operate installations subject to Directive 2003/87/EC, but the issue whether it is properly formulated is open.
California carbon leakage list
- Category: California cap-and-trade
Leakage refers to a reduction in emissions of GHGs within the California State that is offset by an increase in GHG emissions outside the State. Risk of leakage is highest for industries in which production is highly “emissions intensive” (leading to high compliance costs) and trade exposed (i.e., that face competition from out-of-state producers).
| California carbon leakage list.pdf | [ ] | 73 kB |
Rules on client-as-agent model specified by ESMA in EMIR RTS on indirect clearing arrangements
- Category: EMIR
Regulatory Technical Standards prejudge that facilitating indirect clearing arrangements is not mandatory for clearing members – the contentious issue as yet.
Basic rules on the commercial circulation of Australian carbon credit units
- Category: Australia cap-and-trade
Under the Australian climate legislation ACCUs are personal property and, subject to the relevant provisions, transmissible by assignment, by will and by operation of law.
Treasury financing activities “contaminated” by non-financials’ commodities trading units in effect of ESMA’s decisions on EMIR
- Category: EMIR
Commodity firms strongly opposed that exceeding the clearing threshold for one class of OTC derivative should trigger application of the clearing obligation or of the risk mitigation techniques for all classes of OTC derivative contracts.
Connection agreements considered a reportable fundamental data item under the REMIT Regulation
- Category: REMIT
Classifying connection agreements as REMIT fundamental data item is not obvious and does not follow literally from the regulatory language. However, if such classification is correct, the electricity generators should immediately include such data in their REMIT reports.
Procedure for linking EU ETS with other emissions trading schemes – technicalities important for practice
- Category: Emissions trading
Linking does not necessarily mean a merger. Technical compatibility seems far more feasible option. What are the consequences of this limited approach?