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FAQs on transaction reporting – Question II.3.1.27

How to report index trades. We would like to request further clarification in relation to the reporting of index trades. Should index trades be reported using Table 1 only or should we report a Table 2 first, followed by a Table 1 document once the price is known?


Answer:

Some contracts (both derivatives and non-derivatives) for physical delivery of gas or electricity (and/or their transportation) are traded on the basis that the price will be fixed by an index value or reference price upon its publication. When these types of contracts are traded bilaterally, market participants should consider the following examples in order to decide to report their trades with Table 1 or Table 2 of Commission Implementing Regulation (EU) No 1348/2014:

Trade example 1: A market participant (MP) buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract has a fixed price and quantity.  Reporting using Table 1.

Trade Example 2: A MP buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract does not have a fixed price, but uses the following index:

ELECTRICITY-DAILY INDEX BASE SPOT-EXCHANGE X: meaning that the price for a Pricing Date will be that day’s Specified Price per MWh of electric energy at constant power for delivery on the Delivery Date, stated in Euros, published on the exchange website.  Reporting using Table 1.

Trade Example 3: A MP buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract does not have a fixed price, but uses the following index:

ELECTRICITY-MONTH FUTURES BASE-EXCHANGE X: meaning that the price for a Pricing Date will be that day’s Specified Price per MWh of base electricity on the EXCHANGE X of the Futures Contract, stated in Euros, published on the exchange website. Reporting using Table 1.

Trade Example 4: A MP buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract does not have a fixed price, but uses the following formula index:

EUR2/MWh + ELECTRICITY-DAILY INDEX BASE SPOT-EXCHANGE X: this means that the price for a Pricing Date will be that day’s Specified Price per MWh of electric energy at constant power for delivery on the Delivery Date, stated in Euros, published by EXCHANGE X on the exchange website. Reporting using Table 1  with the value of EUR 2 in Field N (36) Index Value

Trade Example 5: A MP buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract does not have a fixed price, but uses the following formula/basket index:

50% ELECTRICITY-DAILY INDEX BASE SPOT-EXCHANGE X + 50% ELECTRICITY-MONTH FUTURES BASE-EXCHANGE X. Reporting using Table 2. Executions will be reported using Table 1.

Trade Example 6: A MP buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract does not have a fixed price, but uses the following index:

A bilaterally agreed unpublished price e.g. the yearly unit cost of production of a gas rig in the North Sea that they jointly own. Reporting using Table 2. Executions will be reported using Table 1.

Trade Example 7: A MP buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract does not have a fixed price, but uses the following formula/basket index:

50% ELECTRICITY-MONTH FUTURES BASE-EXCHANGE X + 50% of a bilaterally agreed unpublished price e.g. the yearly unit cost of production of a gas rig in the North Sea that they jointly own. Reporting using Table 2. Executions will be reported using Table 1.

Trade Example 8: A MP buys an electricity forward contract directly from a counterparty for delivery of 25MW in Country A for the month of August 2016. The contract has no fixed price, but uses the following index:

MONTHLY AVERAGE OF ELECTRICITY-DAILY INDEX BASE SPOT-EXCHANGE X: meaning that the price for a Pricing Date will be the average of all day’s Specified Prices in the month per MWh of electric energy at constant power for delivery on the Delivery Date, stated in Euros, published on the exchange website. Reporting using Table 2. Executions will be reported using Table 1.

When the price of an Index trade is calculated, then Table 2 should apply for the traded and Table 1 for the EXECUTION.  Any available index trade that does not have a calculation, rather than a price differential, without calculation should be reported with Table 1. The examples above apply to both gas and electricity contracts.

Last update: 14/12/2016   RSS_Icon Subscribe to this Page’s RSS