Exchange Council welcomes announcement to merge Powernext business with EEX

(PresseBox) ( Leipzig, )
On Thursday 12th September 2019, the Exchange Council of the European Energy Exchange (EEX) held its third meeting of 2019 in Paris, chaired by Dr Michael Redanz, Managing Director of EWE Trading GmbH. In the course of the meeting, the Exchange Council discussed a number of topics including the recent announcement of the intention to merge current Powernext activities into EEX from the 1st January 2020, the launch of Trade Registration services for the Japanese Power market and EEX’s pre-trade transparency obligations.

At the meeting, the Exchange Council discussed EEX’s intention to merge Powernext activities into EEX as of the 1st January 2020. 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. 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 also discussed 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. The Council were particularly encouraged to hear that EEX has received the necessary approvals from Japanese regulators, thereby confirming that EEX’s 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 explicitly welcomed EEX’s efforts to fulfill 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.

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.
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