News

WSE Group To Offer A New Market

Warsaw, 24 February 2015

WSE Group To Offer A New Market

PRESS RELEASE

• The WSE Group will open a commodity-based financial market within a year
   
• The new market will be operated by the Polish Power Exchange
   
• Electricity futures will be the first instrument to be introduced to trading

On 23 February 2015 the Ministry of Finance issued a decision authorizing the start of trading commodity derivatives on the Financial Instruments Market (RIF) to be operated by the Polish Power Exchange (PolPX). According to the decision of the Minister of Finance, the new market should be opened within a year. Electricity futures will be the first instrument to be introduced to trading.

“Further development of the commodity market is one of the key elements of the WSE Group’s strategy for the coming years. We are glad that the work on the launch of the market in financial derivatives based on commodities is well advanced. This is a major success of our colleagues at PolPX but also a great challenge: to offer a product attractive also for the financial market. Market participants have been waiting for the introduction of the new instrument. It will undoubtedly be an important addition to the product offer of the Group, making our capital market more attractive and opening new options for participants,” said Paweł Tamborski, President of the WSE Management Board.

The Minister of Finance’s approval allows PolPX to open consultations with the market on the details of the new instruments. The last formal legal step required before trade in derivatives opens will be the approval of the terms of trade in a programme of electricity futures by the Polish Financial Supervision Authority.

“The launch of a financial market in PolPX is a natural step in the development of the exchange. We have developed the concept of the instrument, the terms of trading and listing. The Minister of Finance’s decision allows us to open discussions with market participants. The key challenge ahead is to improve liquidity and attract new market participants. In addition to players from the industry who are PolPX members, we will strive to attract Polish and international financial institutions,” said Ireneusz Łazor, President of the Management Board of the Polish Power Exchange.

The increase of turnover on its markets in the last few years ranks PolPX as one of the fastest growing exchanges in Europe and as the most dynamically growing CEE exchange. The rising liquidity of the exchange market in electricity operated by PolPX (186.8 TWh in 2014 in total, equivalent to 119.4 percent of national energy production and 117.7 percent of energy consumption) is the best proof of the confidence of market participants in the transparency of market prices and operating principles.

“The operating rules of the PolPX financial market will be similar to the existing rules of the futures market operated for many years now by the Warsaw Stock Exchange. We will first offer trade in electricity futures, followed by gas futures. The financial market development strategy not only unlocks the potential of PolPX to grow its turnover and attract new participants, it also enables our members to improve management of their buy and sell portfolios,” said Ireneusz Łazor.

Eligible to become members of the commodity-based financial market are energy companies licensed for generation, transmission, distribution or trade in electricity: existing PolPX members as well as Polish and international financial institutions. Authorisation to operate on the PolPX financial market (RIF) is subject to specific criteria of membership: filing a membership application with the PolPX financial market, obtaining the status of Exchange Member, obtaining membership status in WCCH (Warsaw Commodity Clearing House) or signing a clearing agreement with a WCCH member, and filing an application to be authorised for operation on the PolPX financial market.

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Warsaw Stock Exchange is the biggest securities exchange in Central and Eastern Europe and organises trading on one of the most dynamically growing capital markets in Europe. WSE operates a regulated market of shares and derivative instruments and the alternative stock market NewConnect for growing companies. WSE is developing Catalyst, a market for issuers of corporate and municipal bonds, as well as energy markets. Since 9 November 2010, WSE is a public company listed on Warsaw Stock Exchange. For more information visit http://www.gpw.pl

Media contact:
WSE Communication: Maciej Wewiór – Director, WSE Press Spokesperson: +48 22 537 72 90, press@gpw.pl

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The Polish Power Exchange (POLPX) was established at the end of 1999. It is the only licensed energy exchange in Poland. POLPX started its operation on 30 June 2000. The launch of POLPX was one of the first steps towards the liberalisation of the Polish electricity market and the privatisation of the power sector. Since February 2012 POLPX has been a wholly owned subsidiary of the Warsaw Stock Exchange.
POLPX operates the following markets: electricity (Commodity Forward Instruments Market with Physical Delivery - CFIM, Day-Ahead Market - DAM, Intraday Market - IDM and gas market (CFIM, DAMg), as well as Property Rights Market. POLPX is currently one of the most rapidly growing commodity exchanges in the region. This is supported by the membership in EUROPEX, an organisation which promotes the consolidation of energy markets through cross-border links, and gathers all active power exchanges in Europe trading in both commodity and financial instruments. Since December 2010 POLPX and Nord Pool Spot operate joint day-ahead markets on a market coupling basis for the Swe-Pol Link between Sweden and Poland.
In 2014, the aggregate volume for all electricity markets operated by the Polish Power Exchange reached 186.8 TWh (up by 5.8% against 2013), of which the spot market (Day-Ahead Market and Intraday Market) accounted for 23.8 TWh (up by 7.05% comparing to 2013), and the Commodity Forward Instruments Market – for 163 TWh (up by 5.6% against 2013). For the natural gas market, the overall volume totalled 111.6 TWh, which means that it grew almost 47 times comparing to the 2013 volume. The volume traded on the gas sport market (Day-Ahead Market for gas and Intraday Market for gas) reached 6.6 TWh (growth by 16 times against 2013), and on the Commodity Forward Instruments Market – 105 TWh (growth by 54 times comparing to 2013). For more information visit: http://www.tge.pl

Media contact:
Market Relations Department: Agata Samcik – Director, +48 885 885 645, +48 22 341 98 19, press@tge.pl