Accounting cut-off

    The time on every business day established by ECC for every spot product. Spot market trades concluded or registered after the accounting cut-off are considered concluded or registered on the next business day. Unless other provisions are made, the accounting cut-off corresponds to the end of trading on every business day.

    Balance Agreement

    All contractual agreements between the transmission system operator or hub operator and the Trading Participant as well as between the transmission system operator / hub operator and ECC Lux regarding the settlement of power and natural gas deliveries.

    Batch Processing

    Daily ECC process carried out in the evening for daily settlement, position administration as well as the calculation and booking of margins for all transactions for which ECC has taken over clearing.

    Business Day / ECC Business Day

    The days from Monday to Friday on which transactions are settled financially by ECC excluding TARGET II holidays.

    Business Hours

    The business hours are from 7.30 am to 7.00 pm on every business day.

    Cash pledge account

    Pledge account of the Clearing Member with regard a given Non-Clearing Member kept at ECC.

    CCP

    Central Counterparty, central counterparty within the meaning of art. 1 paragraph 31 KWG [German Banking Act]

    Clearing

    Financial and physical settlement of transactions as well as collateralisation of transactions.

    Clearing Account

    Accounts of the Clearing Members, the Sub-CCP and ECC, which are kept by ECC or a third party on behalf of ECC and to which payments are credited or from which such are debited in batch processing during the settlement of the transactions in accordance with the Clearing Conditions.

    Clearing Broker

    Clearing Member which enables his clients to access a Market if such client does not have access to this Market itself. Clients which use their Clearing Member as Clearing Broker must be admitted as Non-Clearing Members and Trading Participants by ECC.

    Clearing Fund

    ECC requests a contribution to the clearing fund from the Clearing Members. This contribution is used, for example, to cover intraday risks and other risks (stress case).

    Clearing House

    Central counterparty for the transactions included in clearing.

    Clearing Member

    Participant in the clearing procedure who has a clearing license. A Clearing Member can also be licensed by ECC as a Trading Participant for one of the products.

    Types: General Clearing Member, Direct Clearing Member.

    Close-out

    An open position in futures and options is closed out by concluding an exactly opposite matching trade. In case of a default on the part of a Clearing Member or upon a request by a Clearing Member in case of a default on the part of a Non-Clearing Member, ECC will close out the positions of the Clearing Member or Non-Clearing Member concerned.

    Contract

    Standardised unit of measurement for transactions. In the case of spot market contracts, this refers to the quantity of the commodity; in the case of derivatives market contracts, it refers to the quantity of the commodity and the maturity date of the delivery. The contract specifications determine the arrangements of any given contract.

    Cooperation Products

    Products which are traded on a market recognised by ECC and for which a Sub-CPP is included in the clearing process on the basis of an agreement.

    Cross-Margining

    Different possibilities of offsetting risks which cancel each other out entirely or in part in a portfolio are referred to as cross-margining by means of which the amount of the margins to be furnished is adjusted to the actual risk. For this purpose, ECC combines net positions into margin classes and margin groups.

    Delivery Margin

    The delivery margin for emission rights is used to hedge against those risks which arise from the claim to delivery which the buyer has towards ECC as a result of a failed delivery of the seller.

    Delivery Period

    The Delivery Period is according to the respective contract specification the period which is defined for delivery.

    Derivatives Market Transaction

    Transaction by a Trading Participant which has a deferred settlement date (futures or options).

    Derivatives Market

    Market or submarket on which transactions in products with a deferred settlement date (usually later than 2 business days) are concluded and/or registered.

    Direct Clearing Member (DCM)

    A Direct Clearing Member is entitled to settle both its own transactions and its customers’ transactions as well as transactions of affiliated trading participants without a clearing license (Non-Clearing Members).

    ECC

    European Commodity Clearing AG. As the central counterparty ECC is the clearing house for all transactions included in clearing.

    ECC Lux

    European Commodity Clearing Luxembourg S.à r.l., a subsidiary of ECC with the objective of providing physical settlement of all transactions for which ECC has assumed clearing for the Trading Participants.

    EEX

    European Energy Exchange. EEX is an exchange operator with various sub-markets on which spot market and derivatives market transactions are traded or registered. At the same time, EEX is the parent company of ECC.

    Emission Allowances

    Trading instruments which are to contribute to the reduction of global CO2 emissions through or on the basis of the Kyoto Protocol.1 allowances equals 1 tonne CO2 equivalent.

    EPEX SPOT

    EPEX SPOT SE, EPEX is a market on which power spot market transactions are concluded or registered in the framework of exchange trading.

    Expiry Month Factor

    In addition to the Additional Margin Parameter, the Expiry Month Factor is used for the calculation of the Additional Margin for net positions in month futures as soon as this future is a front contract. In this way the higher risk during the delivery period (higher volatility or delivery and payment liabilities arising from physical settlement) is taken into account.

    General Clearing Member (GCM)

    A General Clearing Member is entitled to settle both its own transactions and its customers’ transactions as well as transactions of trading participants without a clearing license (Non-Clearing Members).

    HUPX

    HUPX Zrt. HUPX is a market on which power spot and derivatives market transactions are concluded in the framework of exchange trading

    Indirect participant

    A client of a Clearing Member without being a Non-Clearing member which takes part in the clearing procedure at ECC through that respective Clearing Member.

    Initial Margin

    The Initial Margin covers the intraday risk from spot market transactions on power, natural gas and emission allowances.

    Intraday Margin

    Additional margin which the Clearing Member has to deposit with ECC and which the Non-Clearing Member in turn has to deposit with its Clearing Member in the course of an exchange trading day in highly volatile market situations.

    Liquidation

    Replacement purchase for delivery liabilities or  forced sale of accounts receivable from spot market transactions or physically fulfilled futures of a Clearing Member or Non-Clearing Member which have fallen due. Profits and losses from such replacement purchase or forced sale are set off against receivables and liabilities for payment for the deliveries which exist at the same time.

    Margin

    Margin to be furnished in cash or in securities which the Clearing Member has to deposit with ECC and which the Non-Clearing Member has to deposit with its Clearing Member and which is intended to cover the losses that might be incurred in case of a default on account of the open positions in futures and options on the part of such party. There are five types of margins at ECC: the Initial Margin, the Premium Margin, the Additional Margin, the Spread Margin and the Delivery Margin.

    Margin Call

    Clearing Members are obliged to pay Variation Margin on a daily basis. Moreover, the daily adjustment of the Premium Margin for open positions in options can also lead to additional calls with regard to the Premium Margin. These calls or additional calls are referred to as margin calls. The non-performance of a margin call forms a risk for ECC and/or the Clearing Member.

    Market

    Exchange, multilateral trading facility or comparable organisation which permits the conclusion or registration of transactions in products included in clearing by ECC.

    Market Coupling

    A mechanism for the integration of power markets through coordinated pricing and the allocation of transmission capacities.

    Market Coupling Contract

    A contract which makes the available transmission capacity between two market areas tradeable in the form of Physical Transmission Rights (“PTR“) and which makes this the subject of clearing services.

    Netting-out

    Netting out of open positions into net positions.

    Non-Clearing Member

    Participant in the clearing procedure who has concluded an NCM agreement with a Clearing Member and is approved as a Trading Participant for certain products by ECC.

    NOREXECO ASA

    NOREXECO ASA, located in Oslo, Norway, offers a fully regulated trading market for derivatives, serving the forestry, recycled fibre and pulp industries.

    Option Price Model

    ECC uses theoretical option prices as projected option prices in order to calculate possible risks from open positions in options. These theoretical option prices are calculated using the Black76 option price model.

    Position

    Balance of several derivatives market transactions regarding the same contract which have not been settled yet.

    POWERNEXT

    The European Energy Exchange  (EEX) has successfully integrated Powernext as scheduled as of 1 January 2020. All required approvals have been received to integrate the natural gas spot and derivatives markets to EEX and to transfer the registry business to EEX.

    Primary-CCP

    ECC as the central counterparty in its legal relationship with the Sub-CCP

    Product

    Spot market contract or all derivatives market contracts with the same underlying and different maturity dates which are traded in one market and have been included in clearing by ECC.

    PXE

    POWER EXCHANGE CENTRAL EUROPE, a.s. (PXE) is a market on which derivatives market transactions are traded or registered. Spot market transactions of PXE Trading Participants are traded on the common day-ahead market of PXE and OTE (“PXE Spot Market Transactions”).

    Settlement Account

    TARGET2 or CBF 6 Series accounts of the Clearing Members, the Sub-CCP and of ECC, to which the daily balance of their clearing accounts is credited or from which such is debited. ECC specifies whether TARGET2 or CBF 6 Series accounts have to be used as settlement accounts for every product.

    Settlement Day

    Financial and physical settlement of spot market transactions is effected from Monday to Friday and can also take place on official national holidays which are not exchange trading days. This concerns 1 May, Ascension Day, Whit Monday and 3 October provided such are weekdays.

    Short-Option Adjustment

    In the case of short positions in options which are by far out-of-the-money, the short option adjustment replaces the maximum option price projected on the edge of the margin interval in the calculation of the Additional Margin if the short option adjustment is higher than the maximum option price projected.

    Spot Market

    Market or submarket on which transactions regarding products are concluded and/or registered which are settled within a period of two business days.

    Spot Market Transaction

    Transaction by a Trading Participant which is fulfilled within two business days.

    Stop Button

    Application to EEX regarding the exclusion of a Non-Clearing Member and declaration not to execute any further transactions of this Clearing Member on the EEX Derivatives Market which is provided technologically.

    Sub-CCP

    A central counterparty within the meaning of art. 1 paragraph 2 KWG [German Banking Act] which takes part in clearing provided by ECC on the basis of a special agreement (CCP-Sub-CCP Agreement).

    Theoretical Option Price

    Option price which is established with the help of an option price model.

    Time Spread

    Difference in the price of two futures contracts with the same underlying security but different maturities.

    Total Margin

    The total of Premium Margin, Initial Margin, Additional Margin, Spread Margin and Delivery Margin

    Trade

    A trade is a spot market or derivatives market transaction in one of the products approved by ECC which Trading Participants have concluded in a market or which they have registered and which is settled by ECC.

    Trading Conditions

    Conditions passed by a market in accordance with which transactions are concluded and/or registered.

    Trading Day

    Days on which trading takes place or on which transactions can be registered. These are specified by the respective market operator.

    Trading Participant

    Company which is licensed as a Trading Participant in one market, approved as a Trading Participant for one product by ECC and takes part in the clearing procedure on ECC as a Non-Clearing Member or as a Clearing Member.

    Underlying

    The underlying price of power, natural gas, emission allowances, futures and options. Futures have the prices of monthly, quarterly or annual base or peak load power deliveries as their underlying securities.

    Variation Margin

    Profits and losses which result from changes in the value of positions in futures are settled in cash on a daily basis. This daily profit and loss settlement is also referred to as a mark-to-market procedure. The daily credit or debit resulting from this is referred to as the Variation Margin.

    Volatility

    Volatility is a measure of the price fluctuations in the course of one day. ECC analyses the price movements in the underlying securities and time spreads and derives their volatility from this. The Additional Margin Parameter and the Spread Margin Parameter can then be determined on the basis of volatility.