Central Counterparty Settlement
The NZU product that is traded on the emsTradepoint exchange platform is settled by a Central Counterparty (CCP). The CCP is the buyer to the seller and the seller to the buyer, which guarantees end-to-end anonymity for all transactions and reduces counterparty credit and physical delivery risk.
emsTradepoint Limited is the emsTradepoint CCP. emsTradepoint Limited’s obligations as CCP are guaranteed under a parent guarantee granted by Transpower New Zealand Limited. Transpower New Zealand Limited has an AA- investment grade rating by Standard & Poor’s and an Aa3 rating by Moody’s.
Once a trade is formed, it is immediately transferred into two trade legs:
- one for the buyer with emsTradepoint
- one for the seller with emsTradepoint.
Payment obligations are between emsTradepoint and each Participant separately.
The system sets the Delivery Day as 5 Business Days after the day the Trade is formed. On the Delivery Day, the Seller will deliver NZUs to the emsTradepoint EPA account before 4pm. Once a deposit of NZUs has been confirmed into the emsTradepoint account the NZUs will be transferred into the Buyers’ account by 4pm on the Day after the Delivery Day. This is the Settlement Day.
emsTradepoint will issue an invoice to net Buyers and BCTIs to all net Sellers for all Trades due on the Delivery Day 5 Business Days prior to the Delivery Day. Payment is due to emsTradepoint by 4pm on the Delivery Day. Once payment has been confirmed into the emsTradepoint bank account payment will be made into the Buyers’ account by 4pm on the day after the Delivery Day. This is the Settlement Day.
Settlement for Trading Fees
Trading Fees for the month are invoiced on the first Business Day of the following month. Payment is due to emsTradepoint 10 Days after the invoice has been received.
We issue monthly statement summaries that list out all the trades and payments carried out in the previous Calendar Month.