Options and Futures:
MEFF
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49
STRUCTURE ORGANISATION AND OPERATION
OF THE SPANISH SECURITIES MARKET
B. MEFF Power, central
clearing house for electricity
derivatives
MEFF Power, MEFF’s service for the electricity
market, started up on March 21, 2011 to offer CCH
services for OTC energy derivatives, thereby enhan-
cing fluidity and transparency in the electricity market
and boosting control of OTC transactions.
The settlement and management of risks and
guarantees for electricity futures is carried out within
MEFF’s current CCH system, through the creation of
an energy division called MEFF Power.
MEFF has been providing a broad range of risk
management services to electricity sector compa-
nies since 2006, and has been the manager of virtual
power option auctions. As a result of its involvement
in these areas, it became aware of significant demand
from Spanish electricity market participants for CCH
services.
Futures and swaps on electricity are accepted pro-
ducts for registration. All electricity market operators,
investment banks and brokers are eligible to become
members of MEFF Power if they so wish and fulfil the
corresponding requirements. Contracts on electricity
are mainly negotiated through specialist brokers.
Negotiated contracts are reported to MEFF, which
becomes buyer vis-a-vis the seller and seller vis-a-vis
the buyer, guaranteeing the successful outcome of the
trades, and the registration, clearing and settlement
thereof. The risks and guarantees associated with the-
se products are managed and settled by the internatio-
nally-recognised systems of MEFF’s CCH.
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