What is the EEX Group?
The EEX Group operates several exchanges for trading and clearing financial products.
Participants in more than 30 countries use the EEX Group platform to trade energy, environmental, freight, metals and agricultural commodities. EEX Group operates several companies as part of its global business:
EEX Group Companies
|Cleartrade Exchange (CLTX)||Singapore-based company that operates futures and OTC cleared derivatives markets in Asia.|
|European Energy Exchange (EEX)||The main energy exchange in Europe. EEX develops and operates regulated markets for energy and other products.|
|European Power Exchange (EPEX SPOT)||Operates physical short-term electricity markets.||Territories for electricity markets:|
|European Commodity Clearing (ECC)||The leading clearinghouse for energy and commodity products in Europe.||ECC provides clearing services for EEX, EPEX SPOT, Powernext and PXE as well as the partner exchanges HUPX and NOREXECO.|
|Gaspoint Nordic||An exchange-based market place for physical trade of natural gas in Denmark.||Natural gas|
|Nodal Clear||The clearinghouse for Nodal Exchange.||Nodal Clear operates as the central counterparty for all Nodal Exchange transactions.|
|Nodal Exchange ||A derivatives exchange providing price, credit and liquidity risk management services to participants in the North American energy markets.|
|Power Exchange Central Europe (PXE) ||Prague-based operator of electricity trading exchange for the Central and Eastern European power markets.||Covers Czech, Slovak, Polish, Hungarian and Romanian electricity markets.|
|Powernext ||French-based market for trading energy products. Operates PEGAS natural gas trading platform.|
EEX Group is a subsidiary of Deutsche Borse Group, which is one of the largest global operators of trading exchanges. EEX Group and its companies operate in 16 worldwide offices.
History of EEX Group
The EEX Group began in 2002 with the merger of two German power exchanges in Leipzig and Frankfurt. Since that time, the company evolved from being a local power exchange into a leading European commodities trading and clearing firm.
In 2006, as the EEX began to grow larger, management spun off the clearing business into a separate entity, creating the European Commodity Clearing (ECC).
In 2008, EEX began a cooperation agreement with Powernext. This led to the establishment of the short-term power trading entity European Power Exchange (EPEX SPOT).
In 2013, EEX and Powernext expanded their relationship in new markets. Their foray into natural gas led to the establishment of PEGAS, the Powernext gas trading platform.
In recent years, EEX Group began to grow the company through mergers and acquisitions. In 2014, it acquired a majority stake in Cleartrade Exchange. In 2015, it acquired a 50% stake in the Danish gas exchange Gaspoint Nordic and a majority stake in Powernext. In 2015, EEX Group also indirectly acquired a majority stake in European Power Exchange (EPEX SPOT) through a subsidiary.
In 2016, Power Exchange Central Europe (PXE) became a part of EEX Group.
Who Are the EEX Group Executives?
EEX Group has a management team consisting of seven officers and managing directors:
|Peter Reitz||CEO||Reitz has been chairman of the management board of EEX since August 1, 2011. He began his career as a product manager at Deutsche Borse AG in Frankfurt. He worked at Dow Jones Indexes in New York before joining the Eurex management Board. Reitz has been a member of the EEX Supervisory Board since 2007.|
|Steffen Kohler||Chief Operating Officer||Kohler has been a member of the EEX Management Board since March 1, 2012. He worked for several companies in the financial services sector prior to joining EEX Group. Kohler started working as a Senior Expert in the Product Development Clearing Business and OTC division of Eurex Clearing in 2003. He was later named Executive Director of the Eurex Market & Product Development Department and helped facilitate cooperation between EEX and Eurex. He joined the EEX Supervisory Board in 2009.|
|Dr. Tobias Paulun ||Chief Strategy Officer||Paulun has been a member of the EEX Management Board since January 1, 2015. He began working for EEX and ECC in product development and strategy in 2009. He was also Managing Director Exchange and board member for EPEX SPOT. His focus has been on the strategic development of EEX Group and the regulatory market environment.|
|Dr. Thomas Siegl||Chief Risk Officer||Siegl has been a member of the EEX Management Board since September 1, 2012. He has a doctorate in technical science and previously worked at Graz University of Technology. Siegl also worked at Arthur Anderson in Frankfurt in the area of Financial and Commodity Risk Consulting. He later headed the Risk Management Division of BHF-Bank Aktiengesellschaft. He has been a member of the Management Board of ECC since 2010.|
|Iris Weidinger ||Chief Financial Officer||Weidinger has been a member of the EEX Management Board since August 15, 2008. She previously was the chief representative for finance and human resource functions and an authorized signatory of ECC. She is an expert in business management and worked with E. Breuninger GmbH & Co., Stuttgart and PwC Deutsche Revision Ag, Leipzig.|
|Executive Director Power Spot Markets||Conil-Lacoste has been a member of the EEX Management Board since January 1, 2015. He serves as Chief Executive Officer of EPEX SPOT and Executive Director Power Spot Markets at EEX. Conil-Lacoste spent 10 years as a commodity trader at Louis Dreyfus. He also previously managed the fixed income department at Ferri. He joined Euronext in 1997 and served as CEO of Powernext from 2001 until March 2015.|
|Dr. Egbert Laege||Executive Director Gas Markets||Laege has been a member of the EEX Management Board since January 1, 2015. He has been a member of the EEX Supervisory Board since June 2008. Laege serves as Chief Executive Officer of Powernext and Executive Director Gas Markets and is responsible for PEGAS markets. He began his career at the Institute of energy Economics at the University of Stuttgart and worked at the Chief Commercial Officer at E.ON. He was a member of the EEX Supervisory Board between 2008 and 2015.|
Images sourced from: https://www.eex.com/en/about/eex/executive-board
How is EEX Group Regulated?
EEX Group operates in a variety of geographies and sectors, each of which has unique regulatory requirements.
The following is an overview of the most important regulatory frameworks under which the company operates:
MiFID II and MiFIR
The Markets in Financial Instruments Directive (MiFID) is an EU regulation designed to increase transparency across all member nations. The regulation was passed in 2004 and implemented in 2007. MiFID harmonizes securities laws across the 28 EU member states as well as Iceland, Liechtenstein and Norway. MiFID incorporates the concept of a passport, which means that firms that have regulatory approval to operate in one EU state can offer their services in the others as well.
As a result of the 2008 global financial crisis, the EU made MiFID more expansive and created MiFID II and Markets in Financial Instruments Regulation (MiFIR). These changes went into effect in 2018. MiFID II made the reporting requirements of derivative contracts more stringent. Commodity contracts are subject to position limits under MiFID II and more onerous reporting requirement.
EEX believes it complies with all aspects of the MiFID II regulatory and reporting requirements.
Wholesale Energy Markets Integrity and Transparency
Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT) is an EU regulation designed to increase transparency and stability in European energy markets. The European Union adopted REMIT in 2011.
REMIT prohibits, among other things, insider trading and market manipulation in energy markets and requires market participants to register with the appropriate national regulatory agencies and report wholesale energy transactions. REMIT also authorizes regulators to collect transaction reports and regulate energy market participants.
EEX has set up a Registered Reporting Mechanism (RRM) group to automatically report all EEX and Powernext (PEGAS) trading data. As a result, EEX Group believes it complies with the requirements of REMIT.
European Market Infrastructure Regulation
The European Market Infrastructure Regulation (EMIR) is European legislation for the regulation of over-the-counter derivatives. It was originally adopted by the EU legislature on July 4, 2012, and then enforced on August 16, 2012.
EMIR requires that counterparties and central counterparty clearinghouses report the details of all derivatives contracts as well as any modifications to those contracts and termination of the contracts.
EEX Group supports the reporting of all of the transactions required under EMIR. ECC, the clearinghouse for EEX, has the right to report all transactions it believes necessary to meet the requirements of EMIR.
Market Abuse Regulation
On July 3, 2016, the European Union began enforcing new market abuse regulations aimed at curtailing market manipulation and the disclosure of inside information. Specifically, REMIT, EU Regulation and Market Abuse Regulation (MAR) require market participants to do the following:
- Disclose relevant inside information with respect to their business operations
- Forward information to regulatory authorities
- Ensure far-reaching accessibility of data
EEX has built a transparency platform, which discloses capacity, usage and unavailability related to power facilities and business information related to companies.
The EEX transparency platform is an official central information platform accepted by the Agency for the Cooperation of Energy Regulators (ACER) and the European Securities and Markets Authority (ESMA).
What Products Does EEX Group Trade?
EEX Group offers customers access to trading and/or clearing for seven different categories of products.
|Category||Products||EEX Group Company||Market Facts|
|Power Spot||EEX Group, through its subsidiary, offers trading in the power spot market in the following countries:||EPEX SPOT||Power products traded through EPEX SPOT are spot products so they are traded based on the immediate price, not a future price. Traders can choose to settle these products either:|
|Power Derivatives||EEX traders have access to a very liquid financial power future contract – the Phelix-DE Future. EEX traders have access to the following power futures markets:||EEX|
|Natural Gas||The EEX trading platforms cover spot and derivatives markets for 12 gas hubs in nine European countries.||Powernext (PEGAS)|
|Environmental Markets||EEX is the only European exchange to offer regular and large-scale primary market auctions for emission allowances on the spot market.||EEX||EEX offers two environmental product secondary markets as well:|
|Global Commodities||EEX offers derivatives trading in the following:||EEX|
EEX offers exchange trading and trade registration of financially settled coal futures.
|Agricultural||EEX offers trading in the following financially settled agricultural derivatives:||EEX||EEX offers agricultural products for order book trading as well as trade registration.|
|Guarantees of Origin||These are certificates that confirm that a given megawatt of power was generated from renewable resources.||Powernext||Powernext offer registry of French Guarantees of Origin and Capacity Guarantees for the French TSO RTE and the Energy Savings Certificate mechanism.|
How Does the EEX Group Conduct Trading?
EEX has developed a new trading platform using a system developed by Trading Technologies (TT). This platform provides access to the following markets:
- Power derivatives
- Emissions spot and derivatives
- Guarantees of Origin
The TT screen allows traders to do the following:
- Register trades for easier clearing
- Enter and manage orders from a user-friendly screen
- View and chart market data
- Utilize automated trading tools
- Access trading from any internet-connected computer or mobile device
- Receive upgrades with new functionality automatically
Traders of admitted companies at EEX AG can also can access EEX markets by using Trayport® GlobalVision Trading Gateway.
EEX offers an interface (GV Portal) which can be used to connect easily to EEX markets from Trayport® GlobalVision Trading Gateway. With this interface traders can access the essential functionalities of a commodities trading platform. GV Portal supports trading on the derivatives market as well as the spot market with one technical interface connection.
However, the GV portal interface only provides functionalities for the placement of exchange orders. Traders can use the EEX WebTrading/Clearing System and the EEX Clearing System for OTC trades. Traders can consult the EEX GV Customer Operating Manual for the details about using this system.
The EEX Group publishes a manual called Trading Conditions that details all of the rules regarding trading EEX Group products. Traders should consult this document for answers to specific trading-related questions.
What Types of Memberships Does EEX Group Offer?
EEX Group offers six classes of memberships.
|Type of Membership||Description|
|Full EEX Membership||Allows exchange trading in the following products:|
|Emerging and Environmental Markets||Allows exchange trading in the following products:|
|Agricultural Products||Allows exchange trading and trade registration in dairy, meat and potato contracts and trade registration for fertilizer contracts.|
|Auction Only||Allows participation in primary market auctions of emission allowances.|
|Non-Trading Broker Membership||Allows non-trading brokers to close trades on behalf and in the name of participants without being exchange members or trade registration members. Non-trading brokers cannot open positions on the EEX.|
|View Only||Allows access to trading screen without trading rights. View-only memberships are limited to a term of three months.|
Admission to the exchange involves five steps:
- Trader must submit the required documentation. Traders must meet the following minimum requirements to apply for membership:
- Proof of personal and professional reliability and professional qualifications of member with management authority.
- Equity of at least €50,000.
- Trader must complete the required EEX exchange trader training. This includes passing an exam.
- Trader must connect electronically to the exchange’s platform(s).
- The ECC must admit the trader. The ECC guarantees clearing and settlement for all transactions. In order for the ECC to admit a new member, the member must do the following:
- Complete a Know Your Customer (KYC) questionnaire and pass KYC assessment.
- Complete a clearing member agreement.
- Confirmation of necessary licensing requirements.
- Completion of a balance group agreement (in the case of physically delivered products).
- Upon admission to EEX, trader can begin trading.
Article 14 of the EEX Exchange Act Rules explains the specific requirements for admission in greater detail.
What Are EEX Group Margin Requirements?
Market participants on EEX Group exchanges need to adhere to initial and spot margin requirements established by ECC.
As a central counterparty, ECC assumes the counterparty risk for all transactions concluded at its partner exchanges. In the event of a default, ECC guarantees payment and delivery. Essentially, ECC mitigates settlement risk.
ECC makes margin decisions for every open position. In order to reflect the diversified risk in large portfolios, ECC acknowledges spreads between different products, which reduce the margin requirement.
The initial margin and spot margin constitute the two main margin types at ECC:
- Initial margin: This is the up-front payment made prior to initiating a transaction. ECC calculates this portfolio-based requirement using industry standards.
- Spot margin: ECC uses a method that calculates Current Exposure Spot Market (CESM) to determine a buffer of margin that prevents the customer from getting frequent margin calls.
For complete details on margin requirements for EEX Group trading, traders should consult the section of the ECC website that details this information.
What Fees and Charges Do EEX Group Assess?
EEX fees fall into three categories:
- Transaction fees
- Annual fees
- Technical fees
Fees in each of these categories vary according to factors such as the type of membership, trading volume, type of connection and number of traders in a trading group. EEX charges some non-mandatory fees for voluntary courses and training.
EEX Group publishes a document Price List EEX Group that lists and explains in detail all of the fees and charges that traders and trading firms incur.
In addition, ECC charges fees related to clearing trades. For details on these transaction fees, traders should consult the price list on the ECC website.
What Market Data Does EEX Group Make Available?
EEX Group has daily, weekly, monthly and annual market data, where applicable, for all of the spot, futures and options products traded on its exchanges.
Traders can also purchase and download end-of-day or delayed data in various file formats via a secured FTP server.
EEX fees for downloads depend on whether the data is current or historic. The exchange also offers annual subscriptions for transparency data. Traders can consult the EEX website for a data price list.
What Educational Materials Does EEX Group Offer?
EEX Group makes a variety of training courses available to traders. Some of this material is available in the form of e-learning courses, while other material is taught at on-site classes. EEX recommends some of these courses as relevant training for the EEX entrance exam.
Most course training periods range from half a day to a full day. Courses listed on the EEX website include the following:
- Comprehensive Exchange Trading
- Spot Market Emission Rights
- EPEX SPOT Power
- Introduction to Exchange Trading
- Energy Trading Simulations
Traders should consult the EEX website for details about how to register for these classes.
In addition, Deutsche Borse, the parent company of EEX Group, offers an Academy with additional courses for traders.
Does EEX Group Have Vendor Partners?
EEX Group works with many outside vendors that supplement the trading and clearing experience. The following Independent Software Vendors (ISVs) have the approval of EEX Group:
- Marex Spectron (EasyScreen Technology)
- Exxeta AG
- FIS Global
- Trading Technologies International, Inc.
- Vela (formerly OptionsCity)
How Can You Get Started Trading?
Many regulated brokerage firms offer contracts for difference (CFDs) based on energy and agricultural products similar to the ones traded on the EEX exchanges.
CFDs are a derivative instrument that offers retail traders a different way to invest in financial markets. CFDs allow traders to use leverage to bet on the price of financial assets. The value of a CFD is the difference between the price of a financial instrument at the time of its purchase and its current price.
Some regulated brokers worldwide offer CFDs on shares, commodities, indices, forex and other financial assets. Customers deposit funds with the broker, which serve as margin. The advantage of CFDs is that trader can have exposure to financial assets without having to purchase shares, ETFs, futures or options.
Traders can open an account at one of these regulated brokerage firms and begin trading CFDs based on EEX group products.