Amendments to the Regulations of the Exchange Clearing House (Commodity market)

Please be advised that 14 September 2018 will be the date of entry into force of the newly adopted amendments to the “Regulations of the Exchange Clearing House (Commodity market)”.

The said amendments to the Regulations are aimed at:

1) adjusting the Regulations to the applicable provisions of law, including in particular in respect of the changes arising from the entry into force of the provisions of the Act of 1 March 2018 Amending the Act on Trading in Financial Instruments and Certain Other Acts (“Implementing Act”),

2) updating the provisions pertaining to risk management and security system.

As regards the amendments aimed at adjusting the Regulations to the applicable provisions of law, the new wording of the Regulations takes into account, in particular, the change in the list of exchange commodities specified in the Commodity Exchange Act of 26 October 2000 (“Commodity Exchange Act”). Accordingly, deleted from the Regulations are the provisions pertaining to CO2 emission allowances, which must be treated as financial instruments starting from the effective date of the Implementing Act. In turn, the amendments to § 1 and to the definitions of “Exchange”, “exchange commodity” and “Exchange Commodity Market” set forth in § 2 of the Regulations are aimed at enabling the execution, within the framework of the Exchange Clearing House, of financial service transactions pertaining to wholesale energy products within the meaning of the Commodity Exchange Act.
Transactions executed as part of the trading operations conducted by Towarowa Giełda Energii S.A. (“Polish Power Exchange”) in accordance with the principles laid down in Article 17 Section 1 of the Implementing Act, i.e. until the date of obtaining a permit to operate an organized trading facility (“OTF”), will be cleared in accordance with the principles defined for wholesale energy products.

Moreover, by introducing, in § 2, the definition of “forward contracts for Property Rights under Certificates of Origin”, the Regulations have enabled the provision, as stipulated in Article 17 Section 6 of the Implementing Act, in accordance with the existing principles (i.e. within the framework of the Exchange Clearing House), of financial services for instruments that do not constitute exchange commodities within the current legal framework.
Due to the introduction of the said amendments, the Table of Fees has also been adjusted. Moreover, a new item has been added to the Table of Fees, pertaining to the charging of a fee for issuing an invoice outside the self-billing system. The IRGiT Management Board will suspend the charging of this fee until the end of 2018.

 

As regards the amendments pertaining to risk management and security system:

1. the definition of “Power Group” has been modified due to the planned implementation of a new margin offset model for energy groups,

2. the provisions regarding the so-called alternative model for the establishment of collateral applied by the House towards Brokerage Houses and Commodity Brokerage Houses (§ 11 Section 2 of the Regulations) have been defined more precisely,

3. the provisions regarding adjustment coefficients for initial margins (§ 39 Section 2 Item 4 of the Regulations) have been deleted due to the discontinuation of the application of these coefficients,

4. the provisions of § 45b Section 2 of the Regulations have been modified by introducing an amendment consisting of making the payments to the fund of individual House Members dependent on the uncovered loss of a Member in stress conditions (previously, these payments were dependent on the amount of the collateral margin),

5. the provisions of § 45h of the Regulations have been modified by deleting the provision authorizing the IRGiT Management Board to set a single amount of the additional payment for all House Members,

6. a new § 45o has been added to the Regulations to set forth the rules governing the use of the House’s own funds for the purpose of securing the liquidity of clearings,

7. the provisions of § 54 Section 2 of the Regulations have been defined more precisely by describing the rules governing the use of cash deposited in the guarantee funds for the purposes of covering costs associated with the closing of positions.

 

Changes in the scope of § 45b Section 2 of the Regulations and the fee and charge table specified in point III.3.1 of the Regulations will come into force on 1st of October 2018.

 

Attached please find a detailed list of the said amendments.

Detailed list of changes.