The EEX Group operates exchanges for trading and clearing financial products.
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.
The EEX Group operates several companies as part of its global business:
|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|
|Grexel||Finish-based company offering consulting and registration services.||Certification schemes, energy marketplace consulting|
|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.|
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. Here’s a brief timeline:
- 2006 – EEX began to grow larger, management spun off the clearing business into a separate entity, creating the European Commodity Clearing (ECC).
- 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).
- 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.
- 2014 – EEX acquired a majority stake in Cleartrade Exchange.
- 2015 – EEX acquired a 50% stake in the Danish gas exchange Gaspoint Nordic and a majority stake in Powernext. The EEX Group also indirectly acquired a majority stake in European Power Exchange (EPEX SPOT) through a subsidiary.
- 2016 – Power Exchange Central Europe (PXE) became a part of EEX Group.
Who Are The EEX Group’s Vendor Partners?
EEX Group works with many outside vendors that supplement the trading and clearing experience worldwide.
The following Independent Software Vendors (ISVs) have the approval of EEX Group:
- Enovea S.A.R.L
- Exxeta AG
- FIS Global
- Likron GmbH
- Trading Technologies International, Inc.
- Vela (formerly OptionsCity)
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||Power spot trading and power derivatives trading in over 12 countries. Traders can participate in day-ahead, intraday, and intra-day auction trading.||EPEX SPOT, EEX, PXE, Nodal|| |
|🔥Natural Gas||The EEX trading platforms cover spot and derivatives markets for 13 gas hubs in ten European countries.||Powernext (PEGAS), Nodal|| |
|🌲Environmental Markets||EEX offers emission auctions and emission spot futures options, regulated under the EU Emission Trading Scheme. (ETS). 90% of EEX's auctions are sold on behalf of EU member states.||EEX|| |
|⛏️Global Commodities||EEX offers derivatives trading in:||EEX, CLTX|| |
|🐄Agricultural||EEX offers trading in two categories of 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|| |
The EEX Platform: How Do You Trade?
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:
- 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.
Access To Trayport® GlobalVision Trading Gateway
EEX offers an interface (GV Portal) that 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. The 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.
Where Can I Find Out More About Trading With EEX?
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 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 Memberships Does EEX Group Offer?
EEX Group offers six classes of memberships.
|Type of Membership||Description|
|Full EEX Membership||Allows exchange trading in power, natural gas, and emerging & environmental markets.|
|EEX Power Markets||Allows traders to trade EEX power products, namely, spots and derivatives.|
|EEX Natural Gas Markets||Allows traders to participate in EEX's 13 European natural gas markets.|
|Emerging and Environmental Markets||Allows exchange trading in the categories of Environmental Markets, Agricultural Markets, Emerging Natural Gas Markets, GB Power , and Futures & Trade Registration of all contracts that are not offered for exchange trading at EEX.|
|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.|
What Is The Registration Process?
Admission to the exchange involves five steps:
- The 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 members with management authority.
- Equity of at least €50,000.
- The trader must complete the required EEX exchange trader training.
- Then, the 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 the KYC assessment.
- Complete a clearing member agreement.
- Confirmation of necessary licensing requirements.
- Completion of a balanced group agreement (in the case of physically delivered products).
- Upon admission to EEX, traders can begin trading.
The EEX admission process also includes passing a trader exam.
EEX Fees And 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.
Reduced Margin Requirement to Mitigate 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 reduces 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 the Current Exposure Spot Market (CESM) to determine a buffer of margin that prevents the customer from getting frequent margin calls.
What Fees Does EEX Charge?
EEX fees fall into three categories:
- Transaction fees
- Annual fees
- Technical fees
Fees in each of these categories vary according to factors such as:
- Membership type
- Trading volume
- Type of connection and number of traders in a trading group
EEX charges some non-mandatory fees for voluntary courses and training.
Where Can I Find The Fee Structure?
The EEX Group has all fees and charges published.
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. The data is for all of the spot, futures, and options products traded on the 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 others are 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.
What Training Courses Does EEX Offer?
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
In addition, Deutsche Borse, the parent company of EEX Group, offers an Academy with additional courses for traders.
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.|
|Jens Rick||Chief Information Officer||Rick has been an EEX board member since the February 1st, 2019. Prior to joining EEX, Rick was the Director of Information Technology at Deutsche Borse AG for 4 years.|
|Anja Kiessling ||Chief Financial Officer||Anja Kiessling was appointed as a board member on October 15th 2020. Kiessling worked in EEX Marketing Operations for 12 years prior to taking a position on the management board.|
Images sourced from: https://www.eex.com/en/eex-ag/boards
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 Compliance
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 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.
What Does MiFID II Compliance Mean For EEX?
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 requirements.
EEX believes it complies with all aspects of the MiFID II regulatory and reporting requirements.
Regulation On Wholesale Energy Markets Integrity and Transparency (REMIT)
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.
What Does REMIT Regulate?
REMIT prohibits, among other things, insider trading and market manipulation in energy markets.
It also 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 (EMIR)
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.
Does EEX Abide EMIR Regulations?
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.
What Is The Market Abuse Regulation (MAR)?
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
What Is The EEX Transparency Platform?
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).
Where Can I Start Trading?
Customers deposit funds with the broker, which serve as a margin.
Traders in can open an account at one of these regulated brokerage firms to begin trading commodities.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. <b>Between 74%-89% of retail investor accounts lose money when trading CFDs.</b> You should consider whether you can afford to take the high risk of losing your money.
Learn more about the world’s largest commodity exchanges including:
- Intercontinental Exchange (ICE)
- Zhengzhou Commodity Exchange (ZCE)
- Deutsche Borse Group
- India’s Multi (CMX)
- Brasil Bolsa Balcão
If you’d like a primer on how to trade commodities in general, please see our introduction to commodity trading.