As of 15 December 2015, amendments related to the collateral requirements will be implemented in Nord Pool Spot’s regulations. As of that date, members will have the possibility of providing collateral by way of a pledged bank account in banks which are not pre-approved as Settlement Banks (as currently required). The new Pledged Collateral Account Agreement may only be used for the provision of collateral and members who choose this new setup will need a separate bank account for settlement purposes. The settlement account must support Nord Pool Spot’s cash settlement routines (i.e. it must allow direct debit and credit instructions through SWIFT messaging).
The account bank for the new collateral setup will need to fulfil Nord Pool Spot’s credit rating requirements and allow communication with Nord Pool Spot by SWIFT messages.
The current setup for the Nordic and Baltic market, which allows for posting of cash collateral and use of settlement accounts with certain pre-approved Settlement Banks, will still be valid and members who wish to continue with their current account setup do not need to take any action.
Due to legal requirements in the UK, members who wish to use UK bank accounts for collateral purposes may not use the new Pledged Collateral Account Agreement, but can enter into a deed which substantially has the same effect, and which in form and substance corresponds to the Collateral Security Deed used by N2EX members. For accounts held in other jurisdictions Nord Pool Spot may also, depending on the jurisdiction, require satisfactory verification that the new Pledged Collateral Account Agreement will create a valid and enforceable security interest as intended by the Pledged Collateral Account Agreement.
Amendments regarding the new setup concern:
- Trading Appendix 1 – Definitions
- Trading Appendix 4 – Clearing Rules
- New: Trading Agreement 10 – Pledged Collateral Account Agreement
The changes will take effect from 15 December 2015. Members who wish to use the new account setup may however contact Member Services to initiate their migration process pending effectiveness of the rulebook amendments.
About Nord Pool Spot
Nord Pool Spot operates Europe’s leading power markets, offering both day-ahead and intraday trading to its members. 380 companies from 20 countries trade on Nord Pool Spot’s markets in the Nordic and Baltic regions, and on our UK market N2EX. In 2014 the group had a total turnover of 501 TWh traded power. Our markets are operated from offices in Oslo, Stockholm, Helsinki, Copenhagen, Tallinn and London. Nord Pool Spot strives continually to strengthen its business by working with integrity, together with members and stakeholders, to achieve excellence.
Lysaker 1 December 2015
For further information, please contact:
Stina Johansen, Head of Communications, +47 916 50 603 (for press enquiries)
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