EEX supports NCG’s market making scheme to increase liquidity on German gas futures
The European Energy Exchange (EEX) has welcomed an initiative by the German gas market area manager NetConnect Germany (NCG) to support derivatives trading on German natural gas markets by means of an incentive scheme.
Promoting futures market liquidity will improve hedging opportunities for traders and increase attractiveness for long-term investments in Germany.
For the second year, NCG is tendering market making services, using a volume-based model. As part of the first tender for contracts for the first half of 2020 interested parties are being asked to submit their bids by 29th November 2019, 12:00 am, to NCG. The bidders with the highest volume commitment for the first half of 2020 will receive a fixed payment from NCG for concluding a certain number of transactions in futures relating to the NCG virtual trading point.
Subject to required approvals the natural gas markets currently operated by Powernext will be migrated onto EEX as of 1 January 2020. EEX supports NCG’s initiative with an own incentive scheme for the winners of the NCG tender. For those trading participants and on request, all transaction and clearing fees for orderbook trading and trade registration will be waived. The fee waiver only applies to Month and Quarter Futures with maturities month after next (M+2) and quarter after next (Q+2). The fees for trade registration will only be waived as far as the volume for trade registration does not exceed the volumes of deals the trading participant concludes in the order book.
“EEX welcomes NCG’s ambitions to reinforce the German futures market in 2020. EEX will support this program with a complementary incentive scheme to strengthen liquidity on the NCG hub and particularly on the gas exchange,” says Steffen Köhler (pictured), Chief Operating Officer of EEX.
The European Energy Exchange (EEX) is the leading energy exchange in Europe which develops, operates and connects secure, liquid and transparent markets for energy and related products. As part of EEX Group, a group of companies serving international commodity markets, EEX offers contracts on Power and Emission Allowances as well as Freight and Agricultural Products. EEX is part of Deutsche Börse Group.