The European Climate Exchange and ICE Futures Europe today announced their intention to launch two new contracts: an EUA and a CER daily futures contract, subject to regulatory approval. The contracts, formally known as the ICE ECX EUA Daily Futures Contract (ECX EUA Daily Futures) and the ICE ECX CER Daily Futures Contract (ECX CER Daily Futures), will be launched jointly before the end of the first quarter of 2009. Exact launch date will follow in due course.
Daily Futures Contracts, with EUAs and secondary CERs as the underlying units of trade, will be physically delivered by the transfer of EU Allowances or Certified Emission Reduction units, as appropriate, from the Seller to the Buyer. The contracts will be listed and admitted to trading on the ICE Futures Europe electronic platform and serve the market as cost-efficient, cleared and standardised contracts.
The principles of the delivery process will be the same as the existing ICE ECX EUA and CER Futures Contracts (i.e. the Selling Clearing Member will deliver to ICE Clear Europe who will then deliver to the Buying Clearing Member) but the process is shortened to reflect the daily nature of the contract.
Patrick Birley, Chief Executive of ECX commented: “These spot-like products will complement our existing liquid futures and options. Market participants will be able to manage their short-term positions with these simple, flexible and cost-efficient contracts.”
All trades will be cleared by ICE Clear Europe. Subject to the ICE Futures Regulations, market participants will also be able to use the Exchange for Physical (EFP),Exchange for Swap (EFS) and Block Trade mechanisms, to register OTC contracts for clearing by ICE Clear Europe.
Further information about the ICE ECX EUA & CER Daily Futures contracts will follow in due course.