Following the entry into force of the Regulation on the ‘Market Correction Mechanism’ (MCM) capping gas prices (see EUROPE 13112/28), the European Commission will propose to set up another MCM for derivatives linked to virtual trading points in the EU other than the Title Transfer Facility (TTF).
According to a document obtained by EUROPE, the European Commission is planning to set up a MCM for other virtual trading points (VTPs) due to expire within the next month to year.
VTPs are non-physical trading hubs that serve as a trading platform for gas deliveries.
The draft Regulation provides that the MCM applies to any commodity derivative traded on a regulated market, the underlying asset of which is a gas transaction in any VTP in the EU.
The European Securities and Markets Authority (ESMA) and the European Agency for the Cooperation of Energy Regulators (ACER) had pointed out that most of these derivatives lack liquidity and that some central clearing counterparties (CCPs) may incur additional costs to change their default management process.
However, the Commission clarifies that the Regulation will not apply to contracts for other derivatives or to the purchase and sale of derivatives linked to other VTPs concluded before the date of entry into force of the Regulation.
To consult the document: https://aeur.eu/f/5ov (Original version in French by Anne Damiani)