EEX says gas trading members should comply with EU price cap (updated)

European Energy Exchange AG

20/12/2022 16:19

(Adds detail)
       LONDON/FRANKFURT, Dec 20 (Reuters) - Energy bourse EEX
 DB1Gn.DE  said on Tuesday that its trading participants should
not enter orders exceeding the gas prices cap of 180 euros
($191.50) a megawatt hour (MWh) set by the European Union on
Monday.
    The bourse, whose gas contracts have a wide reach across the
North West European gas markets and beyond, said if the price
cap is activated on Feb. 15, it will not be able to allow for
order entry or trade execution for affected contracts, except in
certain exceptional cases.
    "Trading participants shall not enter orders exceeding the
imposed price cap. Any exceeding orders (and trades) will be 
cancelled," it said in a statement.
    "EEX has consistently voiced its concerns about the
mechanism and continues to be concerned about the implications
of such a price cap on the markets," it added.
    The EEX settlement pricing procedures would, however,
continue to apply, meaning they will continue to reflect the
fair market value, it said.
    Turning to impact of the move on the EEX' clearing arm, the
European Commodity Clearing (ECC), the statement said what in
the wording of EU lawmakers is called the proposed "market
correction mechanism" in EEX' view was a significant
intervention in the gas market's price formation.
    The ECC assumes the counterparty risk and guarantees the
physical and financial settlement of transactions for a number 
of energy commodity exchanges.
    Both EEX and ECC would provide further information in due
course, the statement added.
    The cap relates to the front-month contract price on the
Dutch Title Transfer Facility (TTF), a virtual exchange
headquartered in the Netherlands.
($1 = 0.9399 euros)
 (Reporting by Nina Chestney and Vera Eckert, Editing by Louise
Heavens)
 ((vera.eckert@thomsonreuters.com; +49 30 2201 33654;
@EckertVera;))