The Romanian Commodities Exchange informs the public that on August 1, 2019, on its new trading platform, “Gas Forward CCP”, the first transaction was carried out on the basis of a standard contract for a period of one week.
As the BRM stated at the end of June, when the platform was launched, in July the registration of market participants took place, as well as the testing and training of users on the platform's operating regimes.
The new platform now allows medium-term (weekly and monthly) contracts to be concluded, with the BRM acting not only as administrator of the trading platform but also as central counterparty for the finalization of trades. This means that, as a result of a subjective double novation operation, each sale and purchase contract concluded between two market participants is transformed into two new contracts, where both the original seller and the original buyer have the same counterparty. The contracts become perfectly fungible, thereby eliminating counterparty risk.
The main advantages of this platform are, therefore, to guarantee the transaction for both the seller and the buyer and to reduce the level of bank guarantees required by the parties by up to five times. The complex working system with the operationalization of three safety margins (initial, variation and delivery) allows the functioning of a modern and integrated trading and post-trading environment, with BRM becoming the guarantor of the concluded transactions. The Romanian Commodities Exchange also provides this market with a guarantee fund to ensure the safe operation of the market, which is currently funded at a level of 1.5 million EURO.
Bursa Română de Mărfuri is convinced that, during the third quarter of this year, the number of participants and transactions on this new market it manages will increase significantly, as the advantages offered by this new market are convincing. Starting from the fourth quarter, as participants familiarize themselves with this new instrument, the BRM will also introduce long-term contracts (quarter, half-year and year).
The launch by the Romanian Commodities Exchange of the new forward natural gas market, with physical delivery and central counterparty, which has become operational and has already registered the first transactions, can be considered a major event in the development of the energy stock exchange activity in Romania, which is likely to bring the country in line with the most advanced development trends in the field within the EU.
