The Exchange Council of the European Energy Exchange (EEX) has welcomed the expansion of the product portfolio on the power derivatives market and agreed on the addition of new products in the rulebook.
EEX plans to introduce a number of power derivatives contracts for the Central/Southeastern European region. In the course of 2018, liquidity on these power spot markets have shown considerable growth rates, resulting into growing demand for long-term trading and risk management instruments. Against this background, EEX will launch Power Futures contracts in cooperation with the local spot exchanges in Bulgaria, Serbia and Slovenia. The products include Euro-listed and financially settled futures for base-load and peak-load power delivery. EEX will also add Greek Power Futures to the exchange order book which supplements the existing offering for Trade Registration.
As a result, EEX will expand its offering on the power derivatives market from 17 to 20 market areas. The launch of weekly, monthly, quarterly and yearly products for the above mentioned market areas is planned for the first half of 2019.
Furthermore, the Council discussed the applicability of pre-trade transparency requirements on the EEX derivatives markets. Under MiFID II, regulated markets and multilateral trading facilities are obliged to continuously publish current bid and offer prices for financial instruments. The European Securities and Markets Authority (ESMA) are firmly of the opinion that the pre-transparency obligations also apply for trade registration services. This would mean that transactions concluded off-exchange and registered for clearing on the exchange would be subject to the same pre-trade transparency requirements as order book transactions. The Exchange Council emphasises that this view has a significant impact on the liquidity of all European energy exchanges and strongly supports EEX in its efforts to meet ESMA requirements.
Finally, the Exchange Council discussed the Clean Energy Package’s proposal on cross border electricity trading and its effect on bidding zone configuration: The legislation is currently being discussed and is expected to be approved by European Institutions by the end of 2018. Changes to the current bidding zones configuration in Europe have a critical impact on the functioning of wholesale electricity markets. Therefore, should any reconfiguration take place, the Exchange Council believes it is of paramount importance that the implementation phase is long enough to allow all stakeholders (market participants, system operators, exchanges, etc.) to adapt to the new situation.
The Exchange Council of EEX is an official body of the exchange under the German Exchange Act. It consists of a total of 24 members who expertly represent the various relevant interest groups and business circles. In addition to the trading participants who are represented by 19 elected members from five different voting groups, four representatives from associations and one representative of energy science belong to the Exchange Council. The tasks of the Exchange Council include the formulation of the rules and regulations of the exchange and their amendments. The Exchange Council is also tasked with the supervision of the Management Board of the Exchange and the appointment of the Head of the Market Surveillance.
