Limit management

ECC limit management

On the spot and derivatives markets cleared by ECC, ECC allows trading limits to be applied. KELER CCP calculates trading limit for all its energy market non-clearing member, that will be reviewed at least on a quarterly basis. KELER CCP notifies its non-clearing members regarding the result of the revision. The trading limit is solely a financial limit KELER CCP does not apply any quantity limits.

The trading limit is the result of an internal process and regulated confidentially within KELER CCP, based on the following components:

  • individual risk assessment: based on the result of annual KYC due diligence questionnaire and the analyses of the provided audited corporate Financial Statement,
  • the volume of the provided basic financial collateral,
  • the average margin requirement calculated by ECC of the last quarter,
  • volume of supplementary financial collateral (if available)

The calculated trading limit can be allocated by KELER CCP's non-clearing members themselves between spot and futures markets as needed. On the spot markets a pre-trade limit can be set both for auction and continuous trading markets. On the auction trading markets the trading limit is for trading days and it resets on every business days, however on the continuous trading markets the trading limit is linked to the settlement cycle, therefore it has to be sufficient to cover weekend and ECC holiday periods.

For non-clearing members with derivatives market membership, a post-trade TMR (Total Margin Requirement) margin limit is set. The nature of the post trade margin limit, is that the sum of margin requirement (spot and derivatives included) calculated by ECC can not exceed the set TMR value. More information can be found in the applicable announcement published by KELER CCP on its’ website.