|EU ETS Auctioning Regulation|
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EU ETS Auctioning Regulation (Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctionin of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community represents a uniform EU legal base for the operation of the European primary market for emissions allowances.
Article 191(2) of the Treaty on the Functioning of the European Union requires that European Union policy is based on the principle that the polluter should pay and, on this basis, the EU ETS Directive provides for a transition to full auctioning over time.
Consequently, large-auctioning is a dominant feature of the European Union Emissions Trading Scheme (EU ETS) in its third phase (2013-2020) and the main method of distributing EU ETS allowances by the EU Member States.
Over the trading period from 2013 to 2020, 57% of the total amount of allowances will be auctioned, while the remaining allowances are available for targeted free allocation to industry.
Justifications to postpone full transition to full auctioning are to avoid carbon leakage and to address risks of increases in greenhouse gas emissions in third countries where industry is not subject to comparable carbon constraints as long as comparable climate policy measures are not undertaken by other major economies.
Beyond 2020 the auctioning of allowances remains the general rule, with free allocation as the exception.
The share of allowances to be auctioned will remain the same after 2020 under the post-2020 EU low carbon framework (see: Questions and answers on the proposal to revise the EU emissions trading system (EU ETS), Brussels, 15 July 2015, p. 2 and the modified wording of Article 10(1) of the EU ETS Directive - European Commision's Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments of 15 July 2015 (COM(2015) 337 final) 2015/148 (COD)).
Legislative process regarding the Auctioning Regulation
The Auctioning Regulation has firstly been amended to allow the early auctioning of 120 million phase three allowances in 2012 (frontloading), in view of the widespread commercial practice in the electricity sector of selling power on a forward basis and purchasing the required inputs (including allowances) when they sell their output.
The corresponding reduction of volumes auctioned in 2013 and 2014 by 60 million allowances in each year was done by the Commission Regulation (EU) No 1210/2011 of 23 November 2011 amending Regulation (EU) No 1031/2010 in particular to determine the volume of greenhouse gas emission allowances to be auctioned prior to 2013 (OJ L 308, 24.11.2011, p. 2)), as well as to list an auction platform to be appointed by Germany (Commission Regulation (EU) No 784/2012 of 30 August 2012 (OJ L 234, 31.08.2012, p. 4).
This was followed soon by the so-called "backloading" (see below).
The above notwithstanding, the EU Climate Change Committee on 18 June 2013 supported Germany's choice of European Energy Exchange (EEX) as its definitive opt-out auction platform under the Auctioning Regulation. The Committee backed an amendment to the Regulation to list EEX in its Annex as Germany's definitive opt-out auction platform, which means the Auctioning Regulation will apply to its auctions in full (EEX also conducts auctions as the common auction platform).
The said amendment to the Auctioning Regulation also provides for a number of technical changes, e.g. introducing more flexibility regarding the timing of aviation allowance auctions. During further legislative procedure the European Parliament and the Council did not raise objections with respect to this amendment and in effect it materialised as the Commission Regulation No 1143/2013 of 13 November 2013 amending Regulation (EU) No 1031/2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community in particular to list an auction platform to be appointed by Germany (OJ L 303, 14.11.2013, p. 10).
On the occasion of clearing the status of EEX as an auction platform, the Regulation 1143/2013 made several other changes to the Auctioning Regulation. Among them are:
- Technical adaptations necessary due to current delays in auction monitor appointment: additions in places providing for the auction monitor competences of the phrase: "if appointed" (new Article 7, paragraph 7, Article 8, paragraph 3 of the Auctioning Regulation);
- Changes in the publication of the auction calendar: auction platform should determine and publish the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of emission allowances to be auctioned in individual auctions each calendar year, by 30 September (instead of 28 February in the earlier text) of the previous year (amendment to Article 11, paragraph 11 of the Auctioning Regulation);
- Clarification on the relation of the admission to the auctions and becoming a member of or a participant in the secondary market: admission to the auctions must not be dependent on becoming a member of or a participant in the secondary market organised by the auction platform or any other trading place operated by the auction platform or by any third party (Article 16, paragraph 1a of the Auctioning Regulation).
Concise legislative history of the 'backloading' issue
The initiative to postpone the auctioning of 900 million allowances from the period 2013-2015 to 2019-2020 (so-called “back-loading”) emerged as a legislative text with the adoption by the European Commission of the proposition of 12 November 2012 for the Auctioning Regulation amendment.
The stance of the European Commission was that the auction time profile was not decided in the primary legislation, i.e. the ETS Directive itself, but rather determined in the implementing legislation, i.e. the Auctioning Regulation, thus changes to the auction time profile were therefore made possible in the ETS Directive.
The European Commission argued that using this limited flexibility should by no means be equated with market intervention (see: MEMO-12-861 of 14 November 2012). Furthermore this option still required agreement through the comitology process, involving Council and Parliament
European Parliament's energy committee (ITRE) voted on 24 January 2013 to reject the European Commission's backloading proposal. The energy committee's opinion was an advisory one. In the opposite, the Parliament's environment committee (ENVI), being the lead committee on the dossier, voted on 19 February 2013 in favour of the backloading.
On 16 April 2013 European Parliament voted against freezing auctions of a portion of CO2 emission quotas, so as to boost the price of EU "polluter's permits". Pursuant to the European Parliament press release: 'A majority felt that interfering with the supply of credits would undermine confidence in the Emissions Trading System (ETS), designed to cut greenhouse gas emissions.'It was also added that 'MEPs opposing the measure advocate deeper reform of the ETS and fear that interfering with the supply of credits could undermine players' confidence in the scheme.'
However, joint statement Energy and Environment Ministers from nine European member states of 7 May 2013 stressed they want to see in 2013 a reform of the the EU ETS to ensure it remains at the forefront of EU policies to combat climate change and drive low carbon investments.
The joint statement set out clear direction and deadlines on next steps on EU ETS reform including calls for national governments in the Council and MEPs in the Parliament to come to a resolution to backloading proposals by July 2013 at the latest as well as called for the European Commission to produce a legislative proposal to deliver proper structural reform to the EU ETS by the end of 2013 at the latest.
The EU Parliament's environment committee's (ENVI) second vote on a draft law to prop up EU carbon prices on 19 June 2013 has brought a major legislative breakthrough. ENVI supported the text granting the European Commission the right to adapt "in exceptional circumstances" the timing of auctions, provided an impact assessment shows the sectors concerned will not face "significant risk" of companies relocating outside the EU. "The Commission shall make no more than one such adaptation and only in the third phase of ETS 2013-2020", the text adds.
Credits withheld should be reintroduced "in a predictable and linear manner starting from the year following that during which allowances have last been withheld" the text says (the original draft from the Commission proposed returning them in 2019-2020). A vote in the full assembly European Parliament on 3 July 2013 supported the legal basis for the European Commission to intervene in the EU ETS (see European Parliament procedure file on the issue). The amendments adopted by the European Parliament on 3 July 2013 can be accessed here.
The European Parliament's files documenting backloading vote in the plenary on the 3 July 2013 show the European legislative body decided to rein in the executive's ambitions to influence carbon market in the administrative way.
The original version tabled by the European Commission (see box) envisioned the power granted to the executive to adapt the auctions' timetable in the every EU ETS period i.e. not only in the years 2013-2012 but also in later years. European Parliament restricted this only to the current trading period.
1) the premises for intervention: "exceptional circumstances" (not only "where appropriate"), and, moreover, "Where an assessment shows for the individual industrial sectors that no significant impact on sectors or subsectors exposed to a significant risk of carbon leakage is to be expected";
2) the possible number of adaptations - only one-off measure available;
3) adaptation was confined to the maximum number of 900 million allowances.
The purpose for the intervention ("orderly functioning of the market") remained unchanged compared to the original European Commission's proposition.
For the final outcome of this legislative procedure see the ETS Directive.
Another problem has arisen due to legislative delays. European Commission options elaborated (EC release of 21 November 2013) in the face of the lack of possibility to apply backloading in 2013 are available here.
1) backloading as of 2014 on the basis of the initial profile, meaning the postponement of backloaded volumes from previously scheduled years 2013, 2014 and 2015 in identical proportions into the subsequent years 2014, 2015 and 2016 (option 1);
2) the distribution of the 2013 backloaded volumes into years 2014 and 2015 - effecting (as opposite to the option 1) in no backloaded volumes in 2016 (option 2).
Under option 1 a sub-option had been differentiated which consised in adding a provision in the following wording:
Further analysis of potential options was made in the European Commission Communication of 19 December 2013.
The issue of backloading has been finalised by the Commission Regulation (EU) No 176/2014 of 25 February 2014 amending Regulation (EU) No 1031/2010 in particular to determine the volumes of greenhouse gas emission allowances to be auctioned in 2013-20.
Accordingly, the volumes to be auctioned in 2014 have been revised as from 12 March 2014 (ICE) and 17 March 2014 (EEX).
The underlying cause of the entire problem was an economic slowdown and an over-allocation of emission permits in the period 2013-2020. The idea of one-off adaptation expressed in the recent ENVI opinion did not answer the question whether in the case of economic recovery the timing of auctions would be once more adjusted. Presumably, it would not. Given EU ETS was designed a priori as a market-based scheme such political intervention poses a precedence and inevitably rises many doubts.
A more long-lasting effect of the above process has been the fact that the circumstances, which gave rise to the regulatory measure such as backloading, drastically revealed, moreover, the need to introduce into the EU ETS a regular mechanism for the reaction to market disturbances - a Market Stability Reseve (MSR).
Common auction platform
Auctioning Regulation provides for the participating Member States and the Commission to procure jointly a common platform to auction allowances on behalf of the EU Member States.
Such appointment is made on the basis of competitive tender procedures (with the use of the joint procurement agreement between the Member States participating in the joint action and the Commission).
The first common auction platform has become (in August 2012) the European Energy Exchange AG (EEX).
Opt-out auction platforms
Auctioning Regulation also provides for individual Member States for the possibility to opt out from the joint procurement of the common auction platform.
This option has been used by three EU Member States i.e. Germany, UK and Poland, from which the first two - the UK and Germany - already appointed their own auction platform (Intercontinental Commodity Exchange (ICE), and European Energy Exchange AG (EEX), respectively), and the third - Poland - has not yet appointed its own opt-out auction platform and is making use of the common auction platform.
Technically, such appointment of the opt-out auction platform is subject to listing in Annex III of the Auctioning Regulation, and both functioning opt-out auction platforms, ICE and EEX, underwent this procedure.
Auctioning of aviation allowances
The auctioning of aviation allowances was suspended in 2012, following the 'stop the clock' Decision (Decision No 377/2013/EU of the European Parliament and of the Council of 24 April 2013 derogating temporarily from Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, OJ L 113, 25.4.2013, p.1) and resumed in 2014.
Analytics for the EU emission allowances auctions
By 30 June 2015, more than 650 auctions have been conducted for phase 3 (with Croatia auctioning its share of allowances as from January 2015. ).
EEX, auctioning on behalf of 27 Member States (25 Member States cooperating on a common auction platform, Germany and Poland) auctioned 88% of the total auctioned amount in 2012 to 2014, with ICE, auctioning 12% of the total volume on behalf of the UK.
Table: Volumes of allowances of phase 3 auctioned by EEX and ICE*
*Source of data: Report on the functioning of the European carbon market, accompanying the document Report from the Commission to the European Parliament and to the Council, Climate action progress report, including the report on the functioning of the European carbon market and the report on the review of Directive 2009/31/EC on the geological storage of carbon dioxide of 18 November 2015 (COM(2015) 576 final, p. 15
**For 2015 the figure refers to number of allowances to be auctioned pursuant to the published auction calendars
Article 4(2) of the Auctioning Regulation generally foresees allowances to be auctioned in the form of either two-day spot or five-day futures.
However, pursuant to the comment provided on the European Commission's auctioning website, emission allowances are to be auctioned 'in the form of spot products, which means delivery within a maximum of five working days after the auction'.
As the Commission further states, the auctioned product 'may or may not be a financial instrument in the meaning of the EU regulatory framework for markets in financial instruments'.
The Commission's FAQ website also confirms that the products auctioned by EEX and ICE are not such financial instruments.
EU ETS Handbook (p. 32) refers to this issue as follows:
"The Auctioning Regulation prescribes the auctioning of allowances as "spot" products with a maximum delivery date of five days after the auction [...]. The auction platforms EEX and ICE deliver the allowances one day after the auction. These auctioned products do not qualify as "financial instruments" under EU financial market legislation, but the Auctioning Regulation ensures that the protections in place are similar to those for any financial instrument covered by EU Financial legislation, notably as regards market abuse, money laundering and customer protection [...]."
The UK Financial Conduct Authority (FCA) atempted to interpret the interactions of the the above provisions with the MiFID II (see Markets in Financial Instruments Directive II Implementation – Consultation Paper I (CP15/43), December 2015, p. 267, 268).
FCA observes the Auctiong Regulation and MiFID II are sometimes overlapping in the following way:
- Article 6(5) of the Auctioning Regulation deems as an investment service or activity the reception, transmission and submission of a bid for a financial instrument (the "five-day future" auction product) on an auction platform by an investment firm to which MiFID applies or a CRD credit institution.
- The Auctioning Regulation also regulates bids for allowances in the form of two-day spot contracts.
- An emission allowance is itself a financial instrument (Section C11 of the Annex I to the MiFID II).
- An option, future, swap, forward rate agreement or any other derivative contract relating to emission allowances is included as a derivative under Section C4 of the Annex I to the MiFID II when it may be settled physically or in cash.
In the FCA's view the effects of the above interactions are as follows:
(1) An emission allowance auctioned as a five-day future or a two-day spot contract is regulated under the Auctioning Regulation.
(2) The five-day future auction product is a financial instrument and is regulated under MiFID. It is included under Sections C4 and C11 of the Annex I to the MiFID II.
(3) The two-day spot contract product is also a financial instrument. It is included under Section C11. It is therefore also regulated under MiFID.
(4) In the FCA's view an emission allowance (including when auctioned under the auction regulation) will not come within C1.
(5) The Auctioning Regulation covers the reception, transmission and submission of a bid.
This corresponds to the MiFID activities of the reception and transmission of orders in relation to one or more financial instruments, execution of orders on behalf of clients and dealing on own account.
(6) The auction regulation provides certain exemptions for aircraft operators and others.
(7) The MiFID activities that apply to a product covered by the Auctioning Regulation are not limited to the MiFID activities listed in paragraph (5) of this list.
EU ETS implemented a single-round, sealed bid, uniform price auction.
Under the above auction design bidders can place any number of bids during a single bidding window of the auction, each bid specifying the number of allowances the bidders would like to buy at a given price. The bidding window is open for at least two hours. Directly following the closure of the bidding window, the auction platform determines and publishes the clearing price at which demand for allowances equals the number of allowances offered for sale in the auction concerned.
Successful EU ETS auction bidders are the ones who have placed bids for allowances at or above the clearing price. Under the EU ETS auction rules all successful bidders pay the same price, regardless of the price they specified in their bids.
The EU ETS auction format does not implement in that regard the alternative approaches, such as multiple-round auctions (be it ascending or descending). For an ascending auction, the auctioneer will fix the auction price for the round, and bidders must submit the quantity they are willing to buy at the given price. Until total demand is below or equal to total supply, a new round is launched with an increased auctioneer's price and revised quantity by bidder willing to stay in the auction. These revised quantities cannot increase compared to the previous rounds' bids. Descending auctions have symmetric characteristics, i.e. the auctioneer's price decreases and the volume of bids increases until demand matches supply (see: Technical Aspects of EU Emission Allowances Auctions Consultation Paper, p. 37).
The EU ETS regulatory choice for a uniform auction price means that the another possible solution, being discriminatory-price auction (where bidders 'pay-as-they-bid') has been rejected. Participating in pay-as-you-bid auctions would require the participant to be well informed of market price and perspective so as to avoid paying too high a price (the so-called winner's curse).
Tied bids (meaning where the price of several bids is the same) under the Auctioning Regulation are sorted through a random selection (Article 7(2)).
The alternative solution i.e. pro-rata re-scaling of tied bids (where all tying bids are proportionally reduced in size so as the total demand equals the offer of EU allowances) has not been considered as appropriate for EU ETS.
Analyses of how EU ETS auctioning arrangements work in practice indicate that, generally, the auction clearing price is in line with the price signal in the secondary market (see: Auctions by the transitional common auction platform, 1st Report or the aforementioned Report on the functioning of the European carbon market, accompanying the document Report from the Commission to the European Parliament and to the Council, Climate action progress report, including the report on the functioning of the European carbon market and the report on the review of Directive 2009/31/EC on the geological storage of carbon dioxide of 18 November 2015 (COM(2015) 576 final, p. 14).
Auction purchase limit and holding limit
EU ETS does not apply auction purchase limit and holding limit - arrangements often used in other cap-and-trades (for particulars see here).
However, the relevant restrictions may be introduced by way of the exchange self-regulation.
EEX Trading Conditions of 7 November 2012 provide an illustrative example in paragraph 44(3), pursuant to which the Management Board of the Exchange can specify a maximum number of contracts for each individual trading participant (order limit). EEX Trading Conditions further specifies that in such a case only orders up to the order limit are suitable for trading and can be executed.
The setting an absolute price floor in the framework of government interventions into the price setting mechanism is not foreseen in the revised EU ETS Directive (except for a limited provision on excessive price volatility in Article 29a) .
Generally a 'reserve price' is defined as the lowest price the seller is willing to accept for the auctioned product.
In EU allowance auctions a reserve price is linked to situation where auction clears significantly below the prevailing secondary market price. For particulars in that regard see:
Each auction platform has to determine and publish the volumes and dates of each individual auction (the so-called auction calendar), before the beginning of each calendar year.
The Auctioning Regulation further provides for an Auction Monitor to be also appointed under a joint procurement agreement between the Member States and the Commission and options for this are currently being assessed.
Access to auctions
Under the Auctioning Regulation auctions may only be conducted by a regulated market authorised under the Directive 2004/39/EC (Markets in Financial Instruments Directive - MiFID).
Also bidding in the EU ETS auctions represents a new regulated activity under which bidders are authorised to participate in the European primary markets in emissions allowances. The legal basis for the said eligibility requirements is Article 18 ("Persons eligible to apply for admission to bid") of the Auctioning Regulation. It should be stressed that only the firms listed in Article 18 are able to bid in emissions auctions under EU ETS rules.
1. Operators including parent companies, subsidiaries and affiliates bidding on their own account.
2. Investment firms and credit institutions authorised and regulated under EU law - investment firms under MiFID, credit institutions under Directive 2006/48/EC (Banking Consolidation Directive – BCD).
Once admitted, they can bid on their own account.
The condition under the said two categories of institutions may also bid on behalf of clients is that they must be authorised to do so by the national competent authority.
Such authorisation must be valid with respect to the auctioned products, and, as was said above, the auctioned products currently auctioned by EEX and ICE, do not constitute a financial instrument under EU legislation for financial markets.
It is noteworthy that the Commission Regulation 1210/2011 of 23 November 2011 removed the requirement for authorisation under the Auctioning Regulation for a MiFID investment firm or a credit institution bidding in relation to two day spot products on its own account.
3. Persons exempt from the authorisation requirements in EU financial law because their trading and investment services activities are only ancillary to their main business (Article 2(1)(i) of Directive 2004/39/EC), but who are authorised under national legislation implementing the rules laid down in the Auctioning Regulation ('Auctioning Regulation business' as opposite to the 'MiFID business').
Article 2(1)(i) MiFID exempts persons dealing on own account in financial instruments, or providing investment services in commodity derivatives or derivative contracts included in Annex I, Section C 10 of MiFID to the clients of their main business, provided this is an ancillary activity to their main business, when considered on a group basis, and that main business is not the provision of investment services within the meaning of MiFID or banking services under Directive 2000/12/EC.
As is the case for investment firms and credit institutions, they may also bid on behalf of clients provided they are authorised by the national competent authority to do so.
Under the UK FSA requirements (Policy Statement (PS 12/12) 'Regulating bidding for emissions allowances under Phase Three of the EU Emissions Trading Scheme') firms should make it clear which activity they intend to carry on. Firms applying to undertake Auctioning Regulation business (bidding) exclusively are assessed primarily against the criteria in Auctioning Regulation rather than the MiFID standards that do not apply to Auctionimg Regulation bidding. If for any reason a firm that applied to carry on Auctioning Regulation bidding exclusively subsequently decides that it would like to carry on MiFID business bidding, it should notify the UK regulator, as this represents a material change in its business profile and will require regulatory consideration.
4. Business groupings of operators bidding on their own account and acting as agent on behalf of their members.
The European Commission FAQ website explains the concept of "business grouping" that it requires the existence of a multi-lateral legal relationship between several ETS operators and/or aircraft operators such as a partnership, joint venture or association of such operators and/or aircraft operators.
The business grouping must have its own (incorporated or unincorporated) legal identity and statute which clearly indicates that the business grouping is controlled by ETS operators and/or aircraft operators. For bidding in the auctions directly on its own account and acting as an agent on behalf of its members, the business grouping could employ the services of in-house or outside traders who must be natural persons acting as the bidder's representative.
5. Public bodies or state-owned entities that control ETS operators or aviation operators.
The European Commission cleared the ambiguities with respect to the status of unauthorised brokers by stating that they are not eligible to apply for admission to bid, but could play a role in facilitating the formation of business groupings.
SMEs covered by the EU ETS as well as small emitters can access the auctions directly after going through the due diligence checks. They may also access the auctions through an intermediary or form a business grouping to act as an agent on their behalf. This may offer them the advantage of minimal transaction costs as well as certainty on the price and quantity of allowances they wish to receive.
Where investment firms, credit institutions or exempt persons bid on behalf of their clients, they must ensure that those clients are themselves eligible to apply for admission to bid, i.e. are included in one of the categories above.
Auction admission requirements
Each bidder may apply for admission to bid at the auction platforms from anywhere in the EU and the EEA-EFTA.
The auction platform must check each application to ensure bidders are eligible to participate under the rules laid down by the Auctioning Regulation and to prevent the auctions being used for criminal activity (EU ETS Handbook, p. 30).
In summary applicants must:
- Hold a nominated registry account;
The general admission requirements are set out in Article 19 ("Requirements for admission to bid") of the Auctioning Regulation, while a full list of Know Your Customer (KYC) information for new participants is set out in Annex II of the Auctioning Regulation.
Considering access to the European Energy Exchange auction the choice of three EEX Memberships is offered:
b) emissions-only membership - access to both or either the Spot and Derivatives markets for emissions products only (EUA, EUAA, CER, ERU),
c) auction-only membership.
Companies who would like to become a member of EEX's emissions spot market in order to access the auctions must first determine whether they are eligible to bid as per the EU rules and the EEX admission requirements.
If the company would prefer to bid indirectly, they may contact a trading member of EEX or a clearing member of the ECC who provides client services. This may require satisfying their requirements for acceptance.
All participants must have an arrangement in place with an ICE Clear Europe Clearing Member or an Exchange Member acting as an Auction-only Access Provider (see the brochure ICE Emissions Auctions. How to participate for further details).
Auctioning Regulation business passporting under the UK rules
Where a firm is seeking to passport MiFID business bidding, the existing architecture for passporting under MiFID applies.
However, passporting issue under the Auctioning Regulation business is open, since MiFID is not relevant in this field.
The above-mentioned FSA Policy Statement PS 12/12 explains this problem on the ground of the UK regulatory regime.
A UK firm seeking to provide Auctioning Regulation bidding through establishing a branch in an EEA (European Economic Area) state must notify the UK regulator with a form that provides it with information that assists supervision of that branch (e.g. address of EEA branches, name and contact details of branch managers).
Where a UK firm is seeking to provide Auctioning Regulation bidding remotely by way of services in another EEA state, a UK firm must notify the UK regulator by email of: (a) its name and firm reference number; (b) the EEA state in which the service is or will be provided; and (c) the start date of the service. In this case, given the limited amount of information, there is no form and instead the firm need only send an email with this information.
An incoming EEA firm may undertake Auctioning Regulation bidding in the UK provided it has been appropriately authorised in its Home Member State. This can be done either by providing services remotely or by setting up a branch in the UK. Where it carries on this activity by setting up a branch in the UK, certain requirements will apply to it (e.g. it must have a person approved by the UK regulator to carry out the role of a Money Laundering Reporting Officer).
This notification rule requires an incoming EEA firm seeking to establish a branch in the UK to submit a form to the UK financial regulator which provides basic information about the branch (e.g. name of the firm, address of any UK branch it has, name and contact details of any branch manager). The form also requires the incoming EEA firm to provide evidence of the authorisation provided by its Home Member State and the identity of the Money Laundering Reporting Officer.
This procedure includes two separate notifications but ensures that an incoming EEA firm updates the UK financial regulator if the information provided on that form changes, or if it ceases to carry on Auctioning Regulation bidding from a branch in the UK.
Revenues from auctioning
The EU ETS Directive provides that at least 50% of auctioning revenues or the equivalent in financial value of these revenues, including all revenues generated from allowances distributed for the purposes of solidarity and growth, should be used by Member States for climate and energy related purposes.
The total revenues generated from the auctions between 2012 and June 2015 exceeded € 8.9 billion (the aforementioned Report of 18 November 2015, p. 15).
|Last Updated on Sunday, 28 May 2017 10:20|