Exchange Council welcomes plans to merge Powernext business with EEX

Related Topics

The Exchange Council of the European Energy Exchange (EEX) has welcomed plans to merge current Powernext activities into EEX from the 1 January 2020.

The council believes that the harmonisation of Powernext and EEX, will enable the exchange to offer all products at one single market place while simplifying the admission of new participants and members will be able to easily trade a larger EEX portfolio including natural gas, power and emission allowances. As a result, customers will gain access to increased trading opportunities and a growing liquidity pool, while continuing to benefit from cross margining effects as ECC will remain the central counterparty for clearing transactions. At the same time, current Powernext clients will be able to continue trading the natural gas portfolio upon admittance to EEX. Once Powernext is incorporated into EEX, it will become a Paris based centre of expertise, maintaining all stakeholder relations and know-how for natural gas markets and registry services.
 
The Exchange Council has also welcomed EEX’s plan to extend its Power Derivatives offering in the first half of 2020 by launching Trade Registration services for the Japanese Power Derivatives market. EEX has received the necessary approvals from Japanese regulators, thereby confirming that plans to launch clearing services for financially-settled Japanese power derivatives is allowed under the Japanese Commodities Derivatives Act. The new product offering, which is subject to standard European regulatory approval, will be the first Asian market area on the EEX Power Derivatives platform, which currently comprises 20 market areas in Europe.
 
Finally, the Exchange Council has explicitly welcomed EEX’s efforts to fulfil pre-trade transparency obligations for trade registration transactions as required by ESMA. Under the new regime, which is currently scheduled to be enforced by ESMA and national competent authorities as of 1 Jan 2020, all trades that are pre-arranged outside the exchange and registered for clearing with EEX/ECC, need to be made transparent if they do not fall under any waivers. The Exchange Council acknowledges that EEX is well prepared for the new regime but supports the EEX position that the deadline for implementation should be aligned with the timeline for a general review of the PTT regime.