Central Counterparty settlement
All products traded on the emsTradepoint exchange platform are settled by a Central Counterparty (CCP). The CCP is the buyer to the seller and the seller to the buyer, which guarantees end-to-end anonymity for all transactions and reduces counterparty credit and physical delivery risk.
emsTradepoint Limited is the emsTradepoint CCP. emsTradepoint Limited’s obligations as CCP are guaranteed under a parent guarantee granted by Transpower New Zealand Limited. Transpower New Zealand Limited has an AA- investment grade rating by Standard & Poor’s and an Aa3 rating by Moody’s.
Settlement process
Once a trade is formed, it is immediately transferred into two trade legs:
- one for the buyer with emsTradepoint
- one for the seller with emsTradepoint.
Physical settlement
On the day of delivery, participants either deliver gas to or take gas away from the relevant hub. Performance on physical delivery obligations is managed under the existing Transmission Codes.
Financial Settlement
emsTradepoint nets all trades delivered in the previous month, as well as trade fees for all trades matched during the previous month, into a single statement, issued monthly. Payment obligations are between emsTradepoint and each participant separately.
Off-exchange trading
emsTradepoint's Off-Exchange service facilitates OTC deals between two participants or brokers. This allows OTC deals to be settled using the emsTradepoint settlement mechanisms so traders and brokers can negotiate directly and benefit from the protection offered by standardised physical and financial settlement rules and central counterparty clearing.