Clearing operation

KELER CCP, as General Clearing Member of European Commodity Clearing AG (ECC), provides General Clearing Member service on the energy markets cleared by ECC as central counterparty:

• EEX European Energy Exchange
• EPEXSPOT European Power Exchange
• HUDEX Hungarian Derivative Energy Exchange (Power segment)
• HUPX Hungarian Power Exchange
• NOREXECO
• PXE Power Exchange Central Europe
• SEEPEX South Eastern European Power Exchange
• SEMOpx Single Electricity Market Operator Power Exchange

As part of the service KELER CCP provides clearing and guarantee undertaking for the cleared spot and derivative market transactions for energy market traders.

During energy market clearing KELER CCP receives the already matched and accepted transactions from the institution clearing the markets as central counterparty. There is no novation provided by KELER CCP during the clearing of energy market transactions (it does not clear transactions as central counterparty), however, as General Clearing Member it guarantees the financial settlement of the transactions concluded by the energy market Non-clearing Members both towards the clients and ECC.

Spot market transaction clearing is for the purchase price at the trade price, while for derivative market transactions variation margin is calculated for the open positions, and then purchase price is settled for the transactions that remained open after expiry.

In order to mitigate risks KELER CCP may apply quantity and/or value limits for the energy market Non-clearing Members on the traded markets.

In order to ensure the purchase price and the variation margin settlement requirements are met, KELER CCP calculates daily margin requirements. The margin requirement is to be met until 10:00 a.m. the following day. The amount of the required margin is at least the margin calculated by ECC. KELER CCP is entitled to distribute the default fund determined by ECC to the Non-Clearing Members in case of exceeding the threshold set in the corresponding announcement.

Energy market transaction purchase price settlement, derivative transaction variation margin settlement and settlement due to the physical delivery of futures transactions occur at 10:00 a.m. on the 1st (first) clearing day after the transaction is made (on T+1, where T = Transaction Day).

For more information on KELER CCP's General Clearing Member (GCM) service, please check out the video below.

Related to energy market clearing, financial position and margin settlement takes place daily. The settlement currencies are Euro (EUR) and British Pound (GBP). The settlement currency of margin settlement is solely Euro (EUR).

Daily financial settlement is based on a single netted financial position by currencies. KELER CCP nets the financial positions of the energy market Non-clearing Member spot market transactions, derivative variation margin and physical delivery transactions arising from futures transactions.

The place of settlement on the cash side is generally the own cash account of the client kept with the chosen Settlement Bank. The place of settlement for clients registered in Serbia is OTP banka Srbija (member of OTP Group).

Until 10:00 on Settlement Day the energy market Non-clearing Members are required to provide the coverage of their financial positions formed in their settlement accounts; KELER CCP withdraws the funds from these accounts for the entire quantity (Partial financial settlement is not available). Parallel with this KELER CCP credits the settlement accounts of the obligees.

Related to settlements, in addition to the settlement of financial positions, energy market Non-Clearing Members are required to meet the daily margin requirement.

The margin requirement is to be met until 10:00 a.m.

Energy market transactions can be settled financially or with physical delivery. The system operator of the energy market concerned is responsible for the process of physical delivery. KELER CCP is not involved in the process of physical settlement; it does not guarantee physical settlement.

The transactions made on the energy markets resulting in physical delivery are subject to purchase price invoicing. ECC operates the invoicing process and ECC Luxembourg s.a.r.l. (the subsidiary of ECC) issues and sends the purchase price invoices directly to the trading counterparties; KELER CCP is not involved in the purchase price invoicing in any form. ECC Luxembourg s.a.r.l. performs central purchase price invoicing (“self invoicing”), thus issues the invoices for both (in ECC Luxembourg s.a.r.l. view) sellers and buyers, on behalf of the sellers. (As a result, energy market Non-clearing Members are not required to issue sales purchase invoices.)

In addition to the purchase price invoices, ECC issues and sends fee invoices directly to the trading counterparties on behalf of the cooperating trading venues and on its own behalf, the place of related financial settlement is directly the account of KELER CCP as paying agent of ECC. KELER CCP collects these paid fees from the traders.

Related to energy market clearing, KELER CCP issues fee invoices to the energy market Non-clearing Members. Payment is based on the invoice issued by the 5th (fifth) business day following the subject month, the invoiced amounts are collected by debiting the Non-clearing Member accounts kept with the chosen Settlement Bank or OTP banka Srbija.

Related to energy market clearing KELER CCP prepares daily preliminary and end-of-day clearing reports for the energy market Non-clearing Members. These reports are directly sent by email.

Financial default occurs if the energy market Non-clearing Member fails to meet the margin requirement or the daily purchase price settlement requirement by the applicable deadline.

Once default is established KELER CCP takes steps without delay to suspend the trading right of the defaulting Clearing Member with ECC and takes the available collaterals in line with the sequence of use stated in the General Business Rules.

Once default is closed KELER CCP calculates and collects the default fees.