New Developments
The Regulation Amending the Organized Natural Gas Wholesale Market Regulation, which was published in the Official Gazette on 12 January 2021 (“Amending Regulation“) and became effective on the same date, brought new provisions regarding the natural gas futures market.
What Changes Does the Amending Regulation Introduce?
Participation agreement: Participants in the natural gas futures market must sign a natural gas futures market participation agreement in addition to the standard transportation agreement and continuous trading platform participation agreement. The natural gas futures market participation agreement will be valid for the period of the relevant continuous trading platform participation agreement.
Guarantee obligation: Guarantee obligations, guarantee types, assets to be accepted as guarantees, guarantee amounts, and requirements related to the amounts exceeding the guarantee amounts in the natural gas futures market will be determined under the Natural Gas Futures Market Operation Procedures and Principles (“VGPUE“) to be issued by the Energy Market Regulatory Board.
Default guarantee account: The Amending Regulation sets forth the establishment of a default guarantee account to create an additional guarantee against market participants’ defaults concerning natural gas futures market transactions.
- The account will be based on the contributions of the market participants. The market operator (“EPİAŞ“) will also provide contributions based on the operation revenue ceiling price, and these contributions will be payable upon the market participants’ defaults.
- EPİAŞ will manage the account.
- The types of assets to be accepted as contribution; revenues that may be created through cash deposits in Turkish lira; usage of the assets in defaults; return of guarantees to the market participants; and contributions to be provided by EPİAŞ will be regulated under the VGPUE.
- In cases where the cash accounts, guarantees, default guarantee account contributions and EPİAŞ contributions are sufficient to cover the default of a market participant, the contributions of the other market participants to the account will not be used.
- The account will not be used for any purpose other than its specific purpose as stated above, and it will be exempt from interim injunctions, seizure, pledge, liquidation decisions and will not be included in bankruptcy assets.
Set-off from the invoice payments: Invoice payments will be set-off in the following order: (i) market operation fees and other fees to be paid to EPİAŞ; (ii) invoiced debts; (iii) natural gas futures market debts and VAT; and (iv) invoice unbalancing debts.
Conclusion
The Amending Regulation provides a foundation for regulations on the natural gas futures market. The VGPUE will regulate the Amending Regulation’s details.
