European Commodity Clearing AG (ECC) celebrates its 10th anniversary today. The Leipzig-based company was founded in 2006 through the spin-off and transfer of the clearing activities of European Energy Exchange AG (EEX) to this subsidiary. ECC was entered in the commercial register of Leipzig on 25 August 2006, only a few days after it had received the banking licence for operating the clearing house.
Since then, ECC has evolved into the leading clearing house for energy and related products in Europe. CEO Peter Reitz explains: “The establishment of ECC has laid the foundation for a European clearing solution. This was based on the idea of offering clearing solutions for other exchanges and trading platforms and, as a result, facilitating simpler and more efficient access to clearing for a broader customer base. An extensive network of partners has helped to ensure that further partners and customers have joined and in this respect, we have achieved a lot during those ten years.”
In the course of its development, ECC has continuously increased the number of products and affiliated partner exchanges as well as Clearing and Non-Clearing Members. Today, it provides services for nine partner exchanges in Europe: the CEGH Gas Exchange of the Vienna Stock Exchange, the European Energy Exchange, EPEX SPOT and Powernext in Paris, the Hungarian HUPX power exchange, the Prague-based Power Exchange Central Europe (PXE), the Danish Gaspoint Nordic gas exchange, the Norwegian NOREXECO commodity exchange as well as the Serbian SEEPEX power exchange. The range of cleared products includes the spot and derivatives markets for power, natural gas and environmental products as well as the derivatives markets for coal, agricultural products, metals, freight rates and pulp products.
Over the years, the number of Non-Clearing Members (i.e. trading participants admitted to trading on the partner exchanges) has increased to 439 companies from 30 countries – compared with 134 companies at the end of August 2006. For the purpose of collateralisation and financial settlement of the transactions, ECC works together with 24 clearing banks. To ensure physical settlement of the transactions, ECC is connected with 23 transmission system operators for power and natural gas. With its competence in physical settlement and the nomination of cross-border trading transactions, it makes a decisive contribution to the integration of the European energy markets.
“Integrated and standardised clearing processes, which lead to cost efficiency in settlement, a high level of expertise in physical settlement and the personal support for our customers – these are all factors which have made ECC what it is today”, explains Dr. Thomas Siegl, who has been the Chief Risk Officer of ECC since May 2010. Since September 2006 more than 18,000 TWh of power and approximately 5,000 TWh of natural gas have been cleared by ECC.
Peter Reitz is convinced that the role of the central counterparty ensuring equal and anonymous market access for all market participants and minimising the default risks of the respective trading participants will become more and more important: “There are diverse growth opportunities for ECC: Trading and settlement on the commodity markets are becoming increasingly international, while, at the same time, it is important to grant participants operating locally access to exchange clearing.”
Thomas Siegl believes ECC is well positioned for future challenges. In 2014, ECC received its EMIR licence and, in this context, it optimised its processes and organisation to fulfil the requirements imposed by the financial market regulation. “Our activities continue to centre around the requirements of our customers and partners. And we will continue to work to further optimise and expand our service in close cooperation with them”, emphasises Siegl. However, ECC aims to grow beyond Europe, acquiring new partner exchanges and establishing itself as a clearing house for additional commodities.
European Commodity Clearing (ECC) is the central clearing house for energy and related products in Europe. In its capacity as the central counterparty ECC assumes clearing as well as physical and financial settlement of transactions concluded on CEGH Gas Exchange of the Vienna Stock Exchange, EEX, EPEX SPOT, Gaspoint Nordic, HUPX, NOREXECO, Powernext, Power Exchange Central Europe and SEEPEX, or registered for clearing on these exchanges.