Newsroom

Enhancements To Electricity Market

Fri 7 Dec 2007

Several enhancements to the Determinations and Procedures underpinning the Electricity Futures and Options market. These enhancements are effective next Monday 10 December 2007.

In summary, the enhancements are:

  • An increase in minimum volume threshold for Block Trades from 5 to 15 lots. This change reflects the requirement for broader participation in order flow given the increasingly diverse group of market users.
  • Introduction of pre-negotiated business rules to enable market participations to arrange business in the over-the-counter market for execution on the Trading Platform (SYCOM).
  • Changes to the Daily Settlement Price (DSP) methodology so that the DSP is derived from the most competitive bid, offer or last trade, and not the mid-point of a pre-determined maximum bid offer spread.
  • A change to the Trade Notification methodology for Block Trades so to better distinguish between the ‘leg prices’ of different Block Trades.
  • A prescribed algorithm to allocate prices to quarterly futures contracts resulting from trades in Strip Products. This enhancement will eliminate the requirement for futures prices to be negotiated, enabling market participants to spend more time focusing on trading instead of post trade administration.

ASX convened an information session on 6 December 2007 to outline the enhancements. An abbreviated set of the questions and the ASX presentation slides are available here.

Further reading

SFE Notice 23/06 provides market users with clarification on the procedures for entering Pre Negotiated Business Orders into the market.SFE Notice 132/05 and SFE Notice 112/05 provide market users with clarification on Full Trade Anonymity.Please see this link to the revised SFE Operational policies- Effective 10 December 2007.