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The European Energy Exchange (EEX) and its subsidiary European Commodity Clearing (ECC) have agreed with OMIP, the Iberian energy derivatives exchange, and OMIClear, its Iberian energy clearing house, to cooperate in trade registration of power derivatives and cross-list their products.
EEX German and French Power Derivatives will then be listed at OMIP/OMIClear and OMIP Spanish Power Derivatives at EEX/ECC. This step enables customers to register and clear several power derivatives having recourse to their preferred clearing house. Within the framework of the agreement, the companies will base their offering on the same settlement prices for the same product. Thus, a very high standard of performance in the risk management and settlement of the traded power derivatives is ensured.
From early 2014, EEX will offer its trading participants initially the registration of financially settled Spanish (SPEL) power futures for clearing by ECC. In return, OMIP and OMIClear will ensure that their participants can register financially settled German power futures (Phelix Futures) and French power futures (French Financial Futures). The companies agreed to mutually support each other in clearing and settlement of the registered transactions.
“We are pleased that with OMIP and OMIClear we have been able to establish an openended cooperation with the leading energy market platform and clearing house on the Iberian Peninsula”, says Dr. Thomas Siegl, Chief Risk Officer of EEX and ECC, adding: “In line with our strategy, this will increase the scope of our clearing offering for power with further regions in Europe, in cooperation with the leading local market which is therefore offering more choice for customers. Through the integration with our other products we will provide improvements for the market as a whole and contribute to the common goal of European market integration.”
Paulo Sena Esteves, Director of OMIClear explains: “With EEX and ECC we have established an open and collaborative cooperation with a prominent player in the pan- European energy trading market that will enable both companies to offer clearing and settlement for a wider array of power products, whilst competing to provide the best and more flexible solutions to customers. Customers will have access to a wider portfolio of power products, competing offerings and the opportunity to gain an edge through the trading in power futures, traded on the most representative power products in the pan- European market”.
Against the backdrop of the changed clearing requirements in the context of EMIR (European Market Infrastructure Regulation), in particular, the companies see this initiative as an establishment of conditions to provide customers with a more attractive clearing portfolio. This aims at persuading customers to transfer their long-term power products traded off the exchanges for the markets in Germany, France and Spain into a collateralised and standardised environment guaranteed by a central counterparty. In this context, market participants profit from the fact that, according to the FAQ of the European Securities and Markets Authority (ESMA), bilateral transactions registered for clearing on the exchange are not considered in the threshold calculation.
