Clearing operation

KELER CCP provides clearing services for the natural gas markets operated by CEEGEX Ltd. and HUDEX Energy Exchange Ltd. for the following transactions:

• intraday and day-ahead transactions (CEEGEX)
• derivative transactions (HUDEX gas segment)

KELER CCP receives the matched futures transactions real time and upon receipt novates them. Transactions on the spot market are received and processed in batch, trades concluded from 18:00 on the previous clearing day until 18:00 on the present clearing day are subject to clearing. With novation KELER CCP interposes itself between the counterparties of the original transaction and becomes the buyer of the seller and the seller of the buyer. This way KELER CCP eliminates counterparty risk. Transaction settlement on the spot market is executed at trade price for the purchase price, while on the futures market variation margin is calculated for the open positions (mark-to-market), and then purchase price is settled based on the final settlement price for the transactions that remained open for delivery after expiry.

In order to mitigate risks, KELER CCP sends information about the available collateral assets of the Clearing Members to CEEGEX. In relation to CEEGEX, the trading system calculates real time financial limits which ensures that only financially covered orders are accepted by the trading system. In case of an uncovered position the order is cancelled, thus matched transaction cannot be created.

In order to ensure that the purchase price and the variation margin settlement requirements are met, KELER CCP calculates daily margin (turnover margin, initial margin) and default fund contribution requirement. The margin requirement is to be met by 9:00 am the following day, while the normal monthly default fund contribution requirement is to be met on the 2. (second) settlement day after the day of calculation.

The purchase price settlement of the spot transactions concluded on CEEGEX, the variation margin settlement of HUDEX futures transactions and settlement related to the physical delivery of futures transactions take place at 9:00 am on the 1. (first) clearing day after the transaction is made (on T+1, where T = Transaction Day).

In CEEGEX/HUDEX clearing the trading participants become Clearing Members directly and can trade for their own account only. KELER CCP offers full segregation to segregate the own assets of KELER CCP and the assets of individual Clearing Members.

Related to CEEGEX/HUDEX clearing financial positions are settled daily. The settlement currency is Euro (EUR).

The daily financial settlement is based on a single aggregated and netted financial position. KELER CCP nets the financial positions arising from the spot transactions, futures variation margin and futures transactions related physical delivery transactions of the Clearing Member.

The place of financial settlement is the Settlement Bank at the choice of the Clearing Member.

Until 9:00 am on Settlement Day the Clearing Members are required to provide in the settlement accounts the debit financial positions formed for the purchase price amount adjusted with VAT corresponding to the VAT residence. From these accounts KELER CCP withdraws the funds for the entire quantity (Partial financial settlement is not available). Parallel with this KELER CCP posts credit entries in the settlement accounts of obligees.

In addition to the settlement of financial positions Clearing Members are required to comply with the daily margin and default fund contribution requirements.

Margin is to be provided by 9:00 am, while the normal monthly default fund contribution requirement is to be met by 9:00 am on the 2nd (second) settlement day after being determined.

The transactions made on CEEGEX/HUDEX are settled with physical delivery; however the system operator licensee, FGSZ controls and guarantees the process of physical delivery. The role of KELER CCP in the process of physical settlement is limited to sending the daily futures delivery positions to HUDEX; KELER CCP does not guarantee physical settlement. Nominations are sent real time as transaction notifications by CEEGEX/HUDEX to the FGSZ Information Platform system. The transaction notification message informs the transmission system operator about the intraday and next gas day netted delivery positions of CEEGEX/HUDEX Clearing Members based on the CEEGEX/HUDEX transactions.

The physical settlement transactions made and delivered on CEEGEX/HUDEX are subject to purchase price invoicing (Futures transactions are not subject to purchase price invoicing provided they are closed before expiry). As part of the central purchase price invoicing (“self invoicing”), KELER CCP issues the invoices of (in KELER CCP’s view) both the buyers and sellers as well, based on the mandate stated in the applicable agreement on invoicing. The invoice issued includes VAT corresponding to the VAT residence. In relation to central purchase price invoicing, KELER CCP has joint responsibility for the issued invoices.

Invoices are issued on a „fungible” basis taking into account the reference period.

In addition to the purchase price invoices, KELER CCP issues fee invoices to the Clearing Members related to CEEGEX/HUDEX clearing. 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 Clearing Member accounts kept with the Settlement Bank.

Purchase price invoicing - How are invoices made?

Related to CEEGEX/HUDEX clearing KELER CCP prepares daily clearing reports for the Clearing Members that are sent via email to the Clearing Members.

Financial default occurs if the Clearing Member fails to meet its margin, default fund contribution, daily purchase price or variation margin 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 and starts to take 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.