General Trading Process


  1. Shipper creates a Trade Proposal
  2. The Trade Proposal is validated and published by the platform and optionally validated by the involved TSOs
  3. One or more Shipper(s) place a Response to the Trade Proposal
  4. Responses are subject to an acceptance procedure (either manually by the Initiating Shipper or automatically by the platform)
  5. Once a Trade Proposal has been matched with a Response, a Trade is created
  6. The Trade is validated by the platform and the TSO
  7. The Trade confirmation is send to both Shippers and to the TSO
  8. The Trade is published on the platform

Secondary Trading Procedures


Terms
Definition
Request
A Request is a response of a potential Buyer on a Trade Proposal, where the Trade Proposal creator is proposing to sell capacity
Trade Proposal
A Trade Proposal is a proposal of a shipper to either buy or sell capacity on the secondary market
Offer
An Offer is a response of a potential Seller on a Trade Proposal, where the Trade Proposal creator is proposing to buy capacity




There are two types of trade proposals:

1. Proposal to sell capacity:

  • A shipper holds capacity that they want to sell on the secondary market
  • Shippers in the market can place requests to buy capacity from the shipper who placed the trade proposal

2. Proposal to buy capacity:

  • A shipper is looking for capacity on the secondary market
  • Shippers in the market can place capacity offers to the shipper who placed the trade proposal




Types of trades

Trade

  • Once a Trade Proposal has been matched with a Response, a Trade is created
  • A Trade is the contractual agreement to assign capacity or transfer the use of capacity on the secondary market.
  • Each Trade has to be accepted by the TSO(s) either automated or manually


There are two types of trades:

Transfer of Use

  • Transfer of Use is a Transaction Type where the Selling Shipper remains the legal counterparty of the TSO and the Buying Shipper nominates the purchased capacity

Assignment

  • An Assignment is a Transaction Type where all rights and obligations are completely allocated from a Selling Shipper to a Buying Shipper





Trading procedures

Trading procedure

  • A Trading Procedure can be considered as the approach how a Trade Proposal is matched with Responses

There are three types of trading procedures (see next sections):

  • First Come First Served (FCFS)
  • Call for Orders (CFO)
  • Over the Counter (OTC)




Basic Principles

  • Contract Duration - the contract period of each trade proposal can be defined individually by the shipper
  • Capacity Categories - firm and interruptible capacity of all categories supported by the respective TSO can be traded on the secondary market
  • Transaction Types - capacity assignment & transfer of use are supported by PRISMA; TSOs can configure which transaction types are allowed to be traded at the corresponding points
  • Trading Times - secondary products can be traded 24/7 on the platform; lead time of the respective TSO must to be considered when trade proposal expiry date is set by the shipper
  • Anonymity - all non-OTC trading procedures are anonymous until the deal is concluded; only then the parties are revealed to each other. The counterparties may remain completely anonymous during the entire contract lifecycle if supported by the TSO (only possible for capacity assignments, with a price of € 0,00)
  • Prices
    • Prices (shipper to shipper) are entered in currency subunit (e.g. ct/kWh/h)
    • Negative prices are allowed, i.e. the selling shipper could pay the buying shipper for taking over capacity
  • Bundling - unbundled entry & exit products at the same point can be sold as a bundle if supported by the TSO
  • Product Settings - the shipper placing the trade proposal can indicate whether it is allowed to buy/sell only a part of the offered/requested amount or period. Additionally, a minimum amount or period per trade can be set.


Over the Counter (OTC)

Definition:

  • One of both Shippers creates Trade Proposal and states the counterparty.
  • The shippers agree on a capacity trade in advance (bilaterally outside of the platform), registration, confirmation and validation is done on the PRISMA platform.
  • Price and conditions of the trade are agreed upon by the parties in advance.
  • Counterparty is notified as soon as the Trade Proposal has been submitted and validated.
  • Counterparty can respond to the Trade Proposal, the Request/Offer is considered as the confirmation of the counterparty.


Rules that apply for OTC deals:

  • The counterparty that accepts or rejects the deal cannot change the price
  • The vendor can also send the OTC request to several parties



Initiated by Selling Shipper
Initiated by Buying Shipper
OTC
Offline negotiation on price & conditions
•Selling Shipper registers transaction
•Buying Shipper only confirms
Offline negotiation on price & conditions
•Buying Shipper registers transaction
•Selling Shipper only confirms



OTC Process Chart



Trade Types


First Come First Served (FCFS)

  • The price of the proposal to buy or sell is considered as the fixed price the buyer/seller is willing to pay/sell for.
  • Once the Request or Offer was submitted, it is automatically accepted
  • FCFS proposals are anonymous until the deal has been confirmed



Initiated by Selling Shipper
Initiated by Buying Shipper
FCFS

  • Binding offer by Selling Shipper at fixed price
  • Countered with (partial) Response by Buying Shipper

  • Binding request by Buying Shipper at fixed price
  • Countered with (partial) Response by Selling Shipper



FCFS Process Chart



Call for Orders (CFO)

Definition:

  • Price of the proposal to buy/sell is considered as max./min. the buyer/seller is willing to pay/sell for
  • The party who created the Trade Proposal can wait for more Requests or Offers to come
  • The party who created the Trade Proposal can select the Requests or Offers he accepts from all received Requests or Offers.
  • CFO proposals are anonymous until the trade has been confirmed; this implies that the trade cannot be negotiated.

Rules that apply to Call for Orders:

  • When placing a request, the buyer can set a maximum price he is willing to pay.
  • When placing an offer, the vendor can set a minimum price he is willing to accept.
  • Both the buyer and the vendor have to set the maximum amount of capacity that they request/offer.



Initiated by Selling Shipper
Initiated by Buying Shipper
CFO
•CFO started by Selling Shipper
•Buying Shipper proposes (partial) Response & price
•Response evaluation by Selling Shipper
CFO started by Buying Shipper
•Buying Shipper proposes (partial) Response & price
•Response evaluation by Buying Shipper


CFO Process Chart





Additional Secondary Features: Trader Lists

  • Trader lists can be used to restrict secondary trading to a defined number of counterparties
  • Trader lists help shippers to restrict trading in accordance with their company’s  requirements (e.g. in terms of credit worthiness)
  • When creating a trade proposal or placing a response shippers can decide whether they would like to apply a trader list in their trade proposal / response
  • It is possible to prepare a number of trader lists in advance


Limitations

  • A trader list has to have at least three entries
  • Once a trader list is used, it can be withdrawn but no other list can be applied to the same trade proposal or response
  • Once a trader list is applied, additional entries (shipper companies) may be added to the list
  • Entries may only be removed after the trade proposal or response has reached a final status (e.g. expired or finished)



Steps on the UI: Trader Lists

  • Trader lists allow you to create groups of 3 or more shippers that you like to be able to participate in secondary trading for you proposals / responses




Additional Secondary Features: Trading Conditions

  • Shippers can choose standard trading conditions provided by PRISMA (EFET standard contract) or attach their own trading conditions to the product.
  • Individual trading conditions can be uploaded to the platform. Those documents are then available during the creation of a trade proposal.

     
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