Market Access

GUARANTEES

In order to operate on the PCE, Participants shall submit – alternatively or cumulatively - financial guarantees as:

1. first-demand bank guarantee issued by banks registered as provided for in Article 13 of Legislative Decree no. 385 of 1 September 1993, and which have a long-term rating awarded by at least one of the following rating agencies: Standard & Poor's Ratings Services, Moody's Investor Service, Fitch and DBRS. The rating must be at least BBB- of the Standard & Poor’s or Fitch scales or Baa3 of the Moody’s Investor Service scale or BBB low of the DBRS scale;
2. non-interest-bearing deposit to be made into the bank account held by GME with the bank in charge of the treasury services.

PA Participants can provide guarantees only as a non-interest-bearing deposit to be made into the bank account held by GME with the bank in charge of the treasury services.
The guarantees posted by the Participant on the PCE are reduced by an amount defined as maintenance margin, set at 3% of the total amount of the guarantees.
Once the bank guarantee has been posted, its amount and/or validity period may be updated by submitting the specific form.

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BANK GUARANTEES

The bank guarantee, the form modifying the bank guarantee or the related updating letters must be submitted or sent (where possible by registered letter with return receipt or courier) only to the bank in charge of GME's treasury services. Upon receipt, the bank will place a stamp on the document with the date of receipt, which will become the "date of submission".

The bank guarantee must be sent to the address of the bank in charge of GME's treasury services:

Banca Popolare di Sondrio Società per Azioni
Viale Cesare Pavese, 336 - 00144 - Rome - Italy 
To the attention of: Ufficio Crediti (Credits Dept.)

For the acceptance of the bank guarantee, the issuing bank must send a swift 799 message to POSOIT22ROM specifying "138–GME" in the field 21 and the following text in the field 79 (free text) “Si conferma che la fideiussione (o lettera di aggiornamento o lettera di patronage) n. ... di € ... nell’interesse dell’operatore .... è stata da noi emessa in data .... e le firme ivi apposte hanno il potere di impegnare il nostro Istituto per siffatte garanzie” (courtesy translation: We confirm that we have issued the bank guarantee (or updating letter or letter of patronage) no. ...... of € …. in favour of the Participant on...... and that the signatures affixed thereto commit our bank to fulfil the obligations arising from the aforesaid bank guarantee).

The Participant may at any time request the return of the bank guarantee according to the terms and conditions established in Technical Rule n. 10 PCE.

For the purpose of submitting the guarantee and related updating letters, the documents must be drawn up according to the templates attached to the PCE Rules and available in the appropriate "forms" section, otherwise the documents cannot be accepted.

If the Participant also wishes to operatein the netting markets, it can submit a guarantee according to the forms attached to the Integrated Text of the Electricity Market Rules or to the Natural Gas Market Rules and allocate part of the guarantee provided to cover exposures that may arise in the ME, MGAS and PCE, by submitting to GME the guarantee allocation form for the netting markets according to the terms and conditions defined in Technical Rules n. 04 ME and in Technical Rules n. 19 MGAS.

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NON-INTEREST-BEARING DEPOSIT

The details of the account to which the bank transfer must be made are:
Banca Popolare di Sondrio
IBAN IT97 H056 9603 2110 0000 7220 X46
SWIFT CODE POSOIT22

The reason for payment to be specified is:
“PCE – deposito infruttifero con facoltà per il GME di poterne disporre” (courtesy translation: PCE – non-interest bearing deposit with GME’s option of using it).

The Participant may at any time request the return of the non-interest-bearing deposit according to the terms and conditions established in Technical Rules n. 10 PCE.

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EXPOSURE

On the PCE, GME defines the exposure of each Participant based on the risk of potential failure to fulfil the obligation related to the payment (settlement) of the CCT (Fee for the assignment of rights of use of transmission capacity) and requests that such exposure is covered by adequate guarantees.

Depending on the operations to be made, the exposure will be calculated for each flow day and then cumulatively aggregated by settlement date. Therefore, during the stage of request for registration on the PCE and in the following stages until settlement, GME carries out financial adequacy checks aimed at verifying that the posted guarantee is adequate with respect to the single exposure held (see Technical Rule no. 04 PCE).

More specifically, when a Participant submits or confirms a registration on the PCE for

1. a transaction increasing, in absolute value, the net sell position of the forward injection account,
2. a transaction increasing, in absolute value, the net sell or buy position of a forward storage account,
3. a CET demand bid pertaining to zonal injection portfolios associated with a forward withdrawal account for the step-down margin only,

an exposure will be generated equal to the product between the quantities offered and the estimated CCT, taking into account the chargeable VAT.

Once the PUN Index GME is known and the portfolios have been assigned, the exposure for

1. CET supply offers registered on the related forward injection account,
2. CET supply offers and demand bids registered on the related forward storage account,
3. CET demand bids pertaining to zonal injection portfolios associated with a forward withdrawal account for the step-down margin only, registered on the related forward account,

will be equal to the value of the CCT actually due, given by the product between the net quantity traded and the real unit value of the CCT, calculated as the difference between the zonal price and the PUN Index GME, and taking into account the chargeable VAT. The credit positions, in this phase, define the possibility of offsetting the debit exposures that have the same settlement date.

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MANAGEMENT OF DEFAULTS

The guarantee system used on PCE provides that, in case of non-compliance, the financial guarantees provided by the participant are used as first-demand bank guarantees or non-interest-bearing deposits.

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