“Each auction will be conducted with an auction reserve price.” “No allowances will be sold at bids lower than the auction reserve price.” Are these provisions present in the EU ETS legislation? No, obviously not. These are the citations from the California cap-and-trade scheme documents. The analogous stipulations we can find in the newest Australia’s emissions scheme.
Instead of this in the EU ETS we have Article 7(6) of the Auctioning Regulation.

Draft Tender Specifications for the Joint procurement of a common auction platform (dated  17 February 2012) seem to make desperate efforts in order this provision be more transparent. Draft Tender Specifications give, moreover, some clues which may be valuable for market actors preparing for auctions participation.

In the article ‘The eligibility to apply for admission to bid in the auction pursuant to the Auctioning Regulation’ there were set out the basic principles for delineating the personal scope of entities granted the right to bid directly in the auctions (see Article 18 of the Auctioning Regulation). It follows that operators of installations and aircraft operators may only bid in the auctions on their own account, and, with some exceptions particularly for business groupings of operators (bidding on their own account and acting as an agent on behalf of their members), the only categories of potential intermediaries in the auctions are investment firms authorised under Directive 2004/39/EC and credit institutions authorised under Directive 2006/48/EC.

Besides, it is noteworthy to remind that another significant exception to the said rule represent commodity firms covered by exemption provided for in Article 2(1)(i) of Directive 2004/39/EC bidding on behalf of clients of their main business but the specific position of these firms in the auctioning context is referred to in greater detail in the above cited post.

Considering the procedure for making common auction platform operational are advanced (the UK opt-out auction platform as well) it is time to look into practical requirements flowing from the Auctioning Regulation as regards the financial institutions participation in the auctions, especially when the financials intermediate for account of their clients.