Liquidity on the brokered UK electricity market centred on the non-multilateral trading facility (non-MTF) on Monday, ICIS understands – the first day that trading system developer Trayport’s new hybrid platform was made available to participants.
“Non-MTF has dominated,” one utility-based UK power trader said late on Monday afternoon.
A second source reported a rough 70-30% split in bids and offers being cast across the two platform types, with the majority on non-MTF.
Traders have the option of choosing which platform bids and offers should be placed on. This had raised fears of a liquidity split on the over-the-counter (OTC) market, but “most people are non-MTF so it’s no great drama at the moment”, one mainland European-based participant confirmed. A separate source commented: “As far as I know it’s all non-MTF today.”
The UK’s Financial Conduct Authority gave brokers a revised deadline of 12 February to redefine physically-settled energy forwards on its systems to avoid such trades falling under the scope of the European Infrastructure Market Regulation (EMIR) ( see EDEM 12 December 2013 ).
However, last week it emerged that physical natural gas and electricity trades will not be covered by new securities legislation, on grounds they are already covered by the Regulation of Wholesale Energy Market Integrity and Transparency – better known as REMIT – and so sidestep upcoming mandated clearing thresholds under EMIR ( see EDEM 15 January 2014 ). Jamie Stewart