Digital clearing with ECC now available on enmacc

We combine the best of two worlds: Direct, bilateral trading and exchange clearing

Direct, bilateral trades can now be negotiated and concluded fully anonymously - even post-trade

Removing the need for framework contracts with individual counterparties in direct, bilateral trading

Fast and reliant trade registration of direct, bilateral trades - low latency and reliable results

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Process

Clearing Process infographic

We offer the same clearing service as a broker does when he brokers a bilaterally cleared trade.

Bilateral trade agreed via enmacc (price, volume and clearing defined)

Enmacc to register trade to exchange for the purpose of clearing

Exchange forwards trade to clearing house

Clearing house confirms trade registration, legally binding contract between counterparty and clearing house

Trader receives confirmation via enmacc

Q&A

Is there a difference between your process and the process of a broker? expand icon collapse icon

No, like the broker, enmacc takes care that the trade is registered automatically at the exchange and confirmed by the clearing house. So from your perspective it is the same as trading cleared via a broker.

Though trading cleared on enmacc provides you additional and new benefits:

  • The process is completely digital and trades are registered in realtime.
  • You don't need an intermediary between you and your counterparty anymore to register the trade automatically at the exchange.
  • You can trade now direct bilateral and stay anonymous even post-trade.
  • As there is no intermediary between you and your counterparty information and data privacy is 100% assured, no information leakage possible anymore.

Will enmacc become a clearing house? expand icon collapse icon

No, enmacc uses a straight through process (STP) to register these trades with the exchange (trade registration of bilaterally negotiated trades is necessary in order for these trades to be cleared, officially called “off-orderbook-on-exchange-trades”).

Note: enmacc thus will only interact with the exchange for trade registration purposes and not with the clearing house itself.

Which exchanges/clearing houses will be connected? expand icon collapse icon

Enmacc is connected to EEX/ECC and will connect to all relevant exchanges/clearing houses in the future. We are in the process of connecting with Nasdaq and ICE and other exchanges.

How is enmacc regulated? expand icon collapse icon

Enmacc is regulated under REMIT for physical instruments and under MiFID II for financial instruments. Under REMIT we are a PPAT as we arrange transactions in physical wholesale energy products.

  1. However our clearing offering has nothing to do with REMIT (no change in PPAT status with clearing) as these are financial instruments and hence all fall under MiFID II.
  2. We are a fully regulated MiFID II investment firm and can arrange transactions in any financial instruments. We therefore comply with all MIFid II requirements.
  3. As we are not matching trades (instead we facilitate the negotiation of bilateral trades we are not a trading venue (exchange)/MTF or OTF. We never use any discretion when facilitating the negotiation of trades.

How is the fee structure for bilaterally cleared trades via enmacc? expand icon collapse icon

  1. No additional fees for cleared trades on enmacc.
  2. Standard clearing fees charged by exchanges / clearing houses remain and are subject to individual arrangements with the exchange/clearing house.

Does this affect me on the regulatory side? expand icon collapse icon

Nothing will change for our clients now that we are BaFin regulated - just internal process adjustments.

Is enmacc connected to the direct clearing members? expand icon collapse icon

enmacc will only interact with the exchange for trade registration purposes and not with the clearing house or direct clearing members.

Is enmacc involved in the margining of cleared trades? expand icon collapse icon

enmacc will only interact with the exchange for trade registration purposes and not with the clearing house or direct clearing members.

What are precequisits for trading cleared products via enmacc? expand icon collapse icon

In order to participate, clients need to be members of the clearing house (directly or indirectly) and they also need to authorise us and update the exchange that enmacc is allowed to register trades in their name. The process differs between the exchanges.

Which products can be cleared? expand icon collapse icon

The exchange provides a list of defined products which can be cleared. enmacc will only allow for trading of products that can be cleared via the respective exchange.

Trading process

Why is the trader sending me a cleared request? expand icon collapse icon

The decision of the trader to send you a request which they want to trade cleared can have various reasons. The most common reason is that the trader just wants to receive as many tradable quotes as possible for the requested product. It also may be that you do not have an existing framework contract with the trader's company or that the credit risk line between you and the counterparty is not sufficient to trade bilateral.

Why is the trader sending me a cleared anonymous request? expand icon collapse icon

The option to send a request anonymous is a well known practice in the market. As your trading partner will be the clearing house and not the counterparty itself, this option is often used as the common standard. Traders might not want to expose their trading interest if this is not needed in order to not expose their position or trading strategy to the market.

What are the differences between a cleared and a not cleared request? expand icon collapse icon

A cleared request will always result in a trade between you and the respective clearing house. A not cleared request will result in a bilateral OTC trade between you and the counterparty which requested you to quote. So if you receive a not cleared request this will result in a contract between you and the counterparty which may also include the physical delivery of the requested energy.

Do I get feedback from the clearing house? How will I be informed about the status of the cleared trade? expand icon collapse icon

Yes, as soon as the request is processed by the clearing house you will receive immediate feedback on our platform if the trade was accepted for clearing or rejected.

Who is able to receive cleared requests? How is ensured that the counterparty can trade a cleared request? expand icon collapse icon

All counterparties that are members of a connected Exchange and completed enmacc's KYC process, will be able to receive a cleared request via enmacc.

What is happening when a trade is done? expand icon collapse icon

As soon as the trade is done it will be registered at the Exchange and from there it will be forwarded to the clearing house so it gets into the clearing process. All this is happening fully automated and you will only be informed about the current status of the deal on the enmacc platform.