02010R1031 — EN — 08.11.2017 — 006.001

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►B COMMISSION REGULATION (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community (Text with EEA relevance) (OJ L 302 18.11.2010, p. 1)

Amended by:









▼B

COMMISSION REGULATION (EU) No 1031/2010

of 12 November 2010

on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community

(Text with EEA relevance)







CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

This Regulation provides for rules on the timing, administration and other aspects of the auctioning of allowances under Directive 2003/87/EC.

Article 2

Scope

This Regulation shall apply to the allocation through auctions of allowances under Chapter II (aviation) of Directive 2003/87/EC and to the allocation through auctions of allowances under Chapter III (stationary installations) of that Directive valid for surrendering in trading periods from 1 January 2013.

Article 3

Definitions

For the purposes of this Regulation, the following definitions shall apply:

1. ‘futures’ means allowances auctioned as financial instruments, pursuant to Article 38(3) of Commission Regulation (EC) No 1287/2006 ( 1 ), for delivery at an agreed future date at the auction clearing price determined pursuant to Article 7(2) of this Regulation and upon which variation margin calls to reflect price movements are payable in cash;

2. ‘forwards’ means allowances auctioned as financial instruments, pursuant to Article 38(3) of Regulation (EC) No 1287/2006, for delivery at an agreed forward date at the auction clearing price determined pursuant to Article 7(2) of this Regulation and upon which variation margin calls to reflect price movements may be secured, either through non-cash collateral or by means of an agreed government guarantee, at the option of the central counterparty;

3. ‘two-day spot’ means allowances auctioned for delivery at an agreed date no later than the second trading day from the day of the auction, pursuant to Article 38(2)(a) of Regulation (EC) No 1287/2006;

4. ‘five-day futures’ means allowances auctioned as financial instruments, pursuant to Article 38(3) of Regulation (EC) No 1287/2006, for delivery at an agreed date no later than the fifth trading day from the day of the auction;

5. ‘bid’ means an offer in an auction to acquire a given volume of allowances at a specified price;

6. ‘bidding window’ means the time period during which bids may be submitted;

7. ‘trading day’ means any day during which an auction platform and the clearing system or settlement system connected to it are open for trading;

8. ‘investment firm’ means the same as in point (1) of Article 4(1) of Directive 2004/39/EC;

9. ‘credit institution’ means the same as in Article 4(1) of Directive 2006/48/EC of the European Parliament and of the Council ( 2 );

10. ‘financial instrument’ means the same as in point (17) of Article 4(1) of Directive 2004/39/EC unless otherwise stated in this Regulation;

11. ‘secondary market’ means the market in which persons buy or sell allowances either before or after they are allocated either free of charge or through auctioning;

12. ‘parent undertaking’ means the same as in Articles 1 and 2 of Council Directive 83/349/EEC ( 3 );

13. ‘subsidiary undertaking’ means the same as in Articles 1 and 2 of Directive 83/349/EEC;

14. ‘affiliate undertaking’ means an undertaking linked to a parent or subsidiary undertaking by a relationship within the meaning of Article 12(1) of Directive 83/349/EEC;

15. ‘control’ means the same as in Article 3(2) and (3) of Council Regulation No 139/2004 ( 4 ) as applied in the Commission’s Consolidated Jurisdictional Notice ( 5 ). Recital (22) of that Regulation and paragraphs 52 and 53 of that Notice shall apply for determining the notion of control for state-owned undertakings;

16. ‘auction process’ means the process encompassing the setting of the auction calendar, the procedures for admission to bid, the procedures for submission of bids, the conduct of the auction, the calculation and announcement of the auction results, the arrangements for payment of the price due, delivery of the allowances and management of the collateral needed to cover any transaction risks, as well as the surveillance and monitoring of the proper conduct of the auctions by an auction platform;

17. ‘money laundering’ means the same as in Article 1(2) of Directive 2005/60/EC having regard to Article 1(3) and (5) of that Directive;

18. ‘terrorist financing’ means the same as in Article 1(4) of Directive 2005/60/EC having regard to Article 1(5) of that Directive;

19. ‘criminal activity’ means the same as in Article 3(4) of Directive 2005/60/EC;

20. ‘auctioneer’ means any public or private entity appointed by a Member State, to auction allowances on its behalf;

21. ‘nominated holding account’ means one or more type of holding account provided for in the applicable Commission regulation adopted pursuant to Article 19(3) of Directive 2003/87/EC for the purposes of participating in or conducting the auction process including the holding of allowances in escrow, pending their delivery under this Regulation;

22. ‘nominated bank account’ means a bank account designated by an auctioneer, a bidder or its successor in title for the receipt of payments due under this Regulation;

23. ‘customer due diligence measure’ means the same as in Article 8(1) of Directive 2005/60/EC having regard to Article 8(2) of that Directive;

24. ‘beneficial owner’ means the same as in Article 3(6) of Directive 2005/60/EC;

25. ‘duly certified copy’ means an authentic copy of an original document that is certified as being a true copy of the original by a qualified lawyer, accountant, notary public or similar professional who is recognised under the national law of the Member State concerned to attest officially as to whether a copy is in fact a true copy of its original;

26. ‘politically exposed persons’ means the same as in Article 3(8) of Directive 2005/60/EC;

27. ‘market abuse’ means either insider dealing as defined in point (28) of this Article or prohibited in Article 38 or market manipulation as defined in point (30) of this Article or in Article 37(b), or both;

28. ‘insider dealing’ means the use of inside information as prohibited pursuant to Articles 2, 3 and 4 of Directive 2003/6/EC in relation to a financial instrument within the meaning of Article 1(3) of Directive 2003/6/EC referred to in Article 9 of that Directive unless otherwise stated in this Regulation;

29. ‘inside information’ means the same as in Article 1(1) of Directive 2003/6/EC in relation to a financial instrument within the meaning of Article 1(3) of Directive 2003/6/EC referred to in Article 9 of that Directive unless otherwise stated in this Regulation;

30. ‘market manipulation’ means the same as in Article 1(2) of Directive 2003/6/EC in relation to a financial instrument within the meaning of Article 1(3) of Directive 2003/6/EC referred to in Article 9 of that Directive unless otherwise stated in this Regulation;

31. ‘clearing system’ means one or more infrastructure connected to the auction platform that can provide clearing, margining, netting, management of collateral, settlement and delivery, and any other services, carried out by a central counterparty, accessed either directly or indirectly through members of the central counterparty who act as intermediaries between their clients and the central counterparty;

32. ‘clearing’ means all processes preceding the opening of the bidding window, during the bidding window and following the closing of the bidding window until settlement, involving the management of any risks arising during that interval, including margining, netting, or novation, or any other services, carried out possibly by a clearing or settlement system;

33. ‘margining’ means the process by which collateral is to be pledged by an auctioneer or a bidder, or one or more intermediaries acting on their behalf, to cover a given financial position, encompassing the entire process of measuring, calculating and administering the collateral put up to cover such financial positions, intended to ensure that all payment commitments of a bidder and all delivery commitments of an auctioneer or one or more intermediaries acting on their behalf can be met within a very short period of time;

34. ‘settlement’ means payment by a successful bidder, or its successor in title, or a central counterparty, or a settlement agent of the sum due for allowances to be delivered to that bidder or its successor in title, or a central counterparty, or a settlement agent, and delivery of the allowances to the successful bidder or its successor in title, or a central counterparty or a settlement agent;

35. ‘central counterparty’ means an entity which interposes either directly between an auctioneer and a bidder or its successor in title, or between intermediaries representing them, that acts as the exclusive counterparty to each of them guaranteeing the payment of the auction proceeds to the auctioneer or an intermediary representing it or the delivery of the auctioned allowances to the bidder or an intermediary representing it, subject to Article 48;

36. ‘settlement system’ means any infrastructure whether or not connected to the auction platform that can provide settlement services, which may include clearing, netting, management of collateral, or any other services, which ultimately enable the delivery of allowances on behalf of an auctioneer to a successful bidder or its successor in title, and the payment of the sum due by a successful bidder or its successor in title to an auctioneer, carried out through either of the following:

(a) the banking system and the Union registry;

(b) one or more settlement agents acting on behalf of an auctioneer and a bidder or its successor in title, accessing the settlement agent either directly or indirectly through members of the settlement agent who act as intermediaries between their clients and the settlement agent;

37. ‘settlement agent’ means an entity acting as an agent providing accounts to the auction platform, through which accounts instructions for the transfer of the auctioned allowances given by the auctioneer or an intermediary representing it and the payment of the auction clearing price by a successful bidder, its successor in title, or an intermediary representing them are safely executed either simultaneously or nearly simultaneously in a guaranteed manner;

38. ‘collateral’ means the forms of collateral security referred to in Article 2(m) of Directive 98/26/EC of the European Parliament and of the Council ( 6 ), including any allowances accepted as security by the clearing system or settlement system;

39. ‘regulated market’ means the same as in point (14) of Article 4(1) of Directive 2004/39/EC;

40. ‘SMEs’ means operators or aircraft operators that are small and medium-sized enterprises within the meaning of Commission Recommendation 2003/361/EC ( 7 );

41. ‘small emitters’ means operators or aircraft operators that emitted 25 000 tonnes of carbon dioxide equivalent emissions or less on average in the three calendar years preceding the year in which they participate in an auction, as determined by their verified emissions;

42. ‘market operator’ means the same as in point (13) of Article 4(1) of Directive 2004/39/EC;

43. ‘establishment’ means any of the following:

(a) place of residence or permanent address within the Union for the purposes of the third subparagraph of Article 6(3);

(b) the same as in point 20(a) of Article 4(1) of Directive 2004/39/EC taking into account the requirements of Article 5(4) of that Directive for the purposes of Article 18(2) of this Regulation;

(c) the same as in point 20(a) of Article 4(1) of Directive 2004/39/EC taking into account the requirements of Article 5(4) of that Directive for the purposes of Article 18(3) of this Regulation, in the case of persons referred to in point (b) of Article 18(1) of this Regulation;

(d) the same as in point (7) of Article 4 of Directive 2006/48/EC for the purposes of Article 18(3) of this Regulation, in the case of persons referred to in point (c) of Article 18(1) of this Regulation;

(e) the same as in point 20(a) of Article 4(1) of Directive 2004/39/EC for the purposes of Article 19(2) of this Regulation in the case of business grouping referred to in point (d) of Article 18(1) of this Regulation;

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(f) the same as in point 20(b) of Article 4(1) of Directive 2004/39/EC for the purposes of Article 28(4) and (5), Article 35(4), (5) and (6) and Article 42(1) of this Regulation;

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44. ‘exit strategy’ means one or more documents determined in accordance with the contracts appointing the auction monitor or the auction platform concerned, setting out detailed measures planned to ensure the following:

(a) the transfer of all tangible and intangible assets necessary for the uninterrupted continuation of the auctions and the smooth operation of the auction process by an auction platform’s successor;

(b) the provision to the contracting authorities or the auction monitor, or both, of all information relating to the auction process, that is necessary for the procurement procedure for the appointment of the auction platform’s successor;

(c) the provision to the contracting authorities, or the auction monitor or the auction platform’s successor, or any combination of these, of the technical assistance that enables the contracting authorities, or the auction monitor or the auction platform’s successor, or any combination of these, to understand, access or use the relevant information provided pursuant to points (a) and (b).

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CHAPTER II

THE DESIGN OF THE AUCTIONS

Article 4

Auctioned products

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1. Allowances shall be offered for sale on an auction platform by means of standardised electronic contracts (‘the auctioned product’).

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2. Each Member State shall auction allowances in the form of either two-day spot or five-day futures.

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Article 5

Auction format

Auctions shall be carried out through an auction format whereby bidders shall submit their bids during one given bidding window without seeing bids submitted by other bidders. Each successful bidder shall pay the same auction clearing price as referred to in Article 7 for each allowance regardless of the price bid.

Article 6

Submission and withdrawal of bids

1. The minimum volume bid for shall be one lot.

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One lot auctioned by an auction platform appointed pursuant to Article 26(1) or Article 30(1) shall be 500 allowances.

One lot auctioned by an auction platform appointed pursuant to Article 26(2) or Article 30(2) shall be 500 or 1 000 allowances.

▼B

2. Each bid shall state the following:

(a) the identity of the bidder and whether the bidder is bidding on its own account or on behalf of a client;

(b) where the bidder is bidding on behalf of a client, the identity of the client;

(c) the volume bid as a number of allowances in integral multiples of lots of 500 or 1 000 allowances;

(d) the price bid in euros for each allowance specified to two decimal points.

3. Each bid may only be submitted, modified or withdrawn during a given bidding window.

Bids submitted may be modified or withdrawn by a given deadline before the close of the bidding window. Such deadline shall be set by the auction platform concerned and published on that auction platform’s website at least five trading days prior to the opening of the bidding window.

Only a natural person established in the Union appointed pursuant to Article 19(2)(d) and authorised to bind a bidder for all purposes relating to the auctions including the submission of a bid (the ‘bidder’s representative’) is entitled to submit, modify or withdraw a bid on behalf of a bidder.

Once submitted, each bid shall be binding, unless it is withdrawn or modified pursuant to this paragraph or withdrawn pursuant to paragraph 4.

4. Where the relevant auction platform is satisfied that a genuine mistake has been made in the submission of a bid, it may, upon request of the bidder’s representative, treat the mistakenly submitted bid as withdrawn after the close of the bidding window, but before the auction clearing price has been determined.

5. The reception, transmission and submission of a bid by an investment firm or credit institution on any auction platform shall be deemed to constitute an investment service within the meaning of point 2 of Article 4(1) of Directive 2004/39/EC where the auctioned product is a financial instrument.

Article 7

Auction clearing price and resolution of tied bids

1. The auction clearing price shall be determined upon closure of the bidding window.

2. An auction platform shall sort bids submitted to it in the order of the price bid. Where the price of several bids is the same, these bids shall be sorted through a random selection according to an algorithm determined by the auction platform before the auction.

The volumes bid shall be added up, starting with the highest bid price. The price of the bid at which the sum of the volumes bid matches or exceeds the volume of allowances auctioned shall be the auction clearing price.

3. All bids making up the sum of the volumes bid determined pursuant to paragraph 2 shall be allocated at the auction clearing price.

4. Where the total volume of successful bids determined pursuant to paragraph 2 exceeds the volume of auctioned allowances, the remaining volume of the auctioned allowances shall be allocated to the bidder that has submitted the last bid making up the sum of the volumes bid.

5. Where the total volume of bids sorted pursuant to paragraph 2 falls short of the volume of auctioned allowances, the auction platform shall cancel the auction.

6. Where the auction clearing price is significantly under the price on the secondary market prevailing during and immediately before the bidding window when taking into account the short term volatility of the price of allowances over a defined period preceding the auction, the auction platform shall cancel the auction.

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7. Before an auction is started, the auction platform shall determine the methodology for the application of paragraph 6, after consulting the auction monitor, if appointed, and notifying the competent national authorities referred to in Article 56.

In between two bidding windows on the same auction platform, the auction platform concerned may modify the methodology. It shall notify the auction monitor, if appointed, and the competent national authorities referred to in Article 56 without delay.

The auction platform concerned shall take the utmost account of the auction monitor’s opinion, where provided.

8. Where one or more auctions are cancelled pursuant to paragraph 5 or 6 consecutively, the combined volume of allowances of those auctions shall be distributed evenly over the following auctions scheduled on the same auction platform.

In the case of allowances covered by Chapter III of Directive 2003/87/EC the number of auctions over which the combined volume to be auctioned must be distributed shall equal four times the number of auctions that were cancelled.

In the case of allowances covered by Chapter II of Directive 2003/87/EC the number of auctions over which the combined volume to be auctioned must be distributed shall equal two times the number of auctions that were cancelled.

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CHAPTER III

AUCTION CALENDAR

Article 8

Timing and frequency

1. An auction platform shall conduct auctions separately through its own regularly recurring bidding window. The bidding window shall be opened and closed on the same trading day. The bidding window shall be kept open for no less than two hours. The bidding windows of any two or more auction platforms may not overlap and there shall be at least a two-hour delay between two consecutive bidding windows.

2. The auction platform shall determine the dates and times of the auctions taking account of public holidays that affect international financial markets and any other relevant events or circumstances that, in view of the auction platform, might affect the proper conduct of the auctions necessitating changes. No auctions shall be held in the two weeks over Christmas and New Year of each year.

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3. In exceptional circumstances, any auction platform may, after consulting the auction monitor, if appointed, change the times of any bidding window, by giving notice to all persons likely to be affected. The auction platform concerned shall take the utmost account of the auction monitor’s opinion, where delivered.

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4. As from the sixth auction or earlier, the auction platform appointed pursuant to Article 26(1) or (2) shall conduct auctions of allowances covered by Chapter III of Directive 2003/87/EC at least on a weekly basis and auctions of allowances covered by Chapter II of Directive 2003/87/EC at least on a two-monthly basis, except that during 2012, the said auction platforms shall conduct auctions of allowances covered by Chapter III of that Directive on a monthly basis at least.

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No other auction platform shall conduct an auction on any of a maximum of two days a week during which an auction platform appointed pursuant to Article 26(1) or (2) conducts an auction. Where the auction platform appointed pursuant to Article 26(1) or (2) conducts auctions on more than two days a week, it shall determine and publish on which two days no other auctions may take place. It shall do so no later than when it makes the determination and publication referred to in Article 11(1).

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5. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned on the auction platform appointed pursuant to Article 26(1) or (2) shall be distributed evenly over the auctions held in a given year, except that volumes auctioned in August of each year shall be half of the volume auctioned in auctions held in other months of the year.

The volume of allowances covered by Chapter II of Directive 2003/87/EC to be auctioned on the auction platform appointed pursuant to Article 26(1) or (2) shall in principle be distributed evenly over the auctions held in a given year, except that volumes auctioned in August of each year shall be half of the volume auctioned in auctions held in other months of the year.

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6. Additional provisions on the timing and frequency of the auctions conducted by any auction platform other than the auction platforms appointed pursuant to Article 26(1) and (2) are set out in Article 32.

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Article 9

Circumstances preventing the conduct of auctions

Without prejudice to the application of the rules referred in Article 58 where appropriate, an auction platform may cancel an auction where the proper conduct of that auction is disrupted or is likely to be disrupted. Where one or more auctions are cancelled consecutively, the combined volume of allowances of those auctions shall be distributed evenly over the following auctions scheduled on the same auction platform.

In the case of allowances covered by Chapter III of Directive 2003/87/EC the number of auctions over which the combined volume to be auctioned must be distributed shall equal four times the number of auctions that were cancelled consecutively.

In the case of allowances covered by Chapter II of Directive 2003/87/EC the number of auctions over which the combined volume to be auctioned must be distributed shall equal two times the number of auctions that were cancelled consecutively.

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Article 10

Annual volumes of the auctioned allowances covered by Chapter III of Directive 2003/87/EC

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1. For each Member State, Annex I to this Regulation sets out the volume of any allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in 2012.

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2. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in 2013 and 2014 shall be the quantity of allowances determined pursuant to Articles 9 and 9a of that Directive for the calendar year concerned, less the allocation free of charge provided for in Articles 10a(7) and 11(2) of that Directive, less half of the total volume of any allowances auctioned in 2012.

The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned each calendar year in 2015-2018 shall be the quantity of allowances determined pursuant to Articles 9 and 9a of that Directive for the calendar year concerned, less the allocation free of charge provided for in Articles 10a(7) and 11(2) of that Directive.

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The volume of allowances to be auctioned in a given year determined pursuant to the first or second subparagraphs of this paragraph in 2014-16 shall be reduced by the quantity of allowances for the respective year set out in the second column of the table in Annex IV to this Regulation.

Where in 2014 the volume of reduction set out in Annex IV cannot be spread over a period of more than 9 months it shall be decreased by 100 million allowances and thereafter by the same amount for each quarter of the year. In that case, the volumes of reduction for 2015 and 2016 shall be adjusted in equal instalments accordingly.

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The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned as from 2019 shall be the quantity of allowances established in accordance with Articles 10(1) and 10(1a) of that Directive.

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In respect of Member States applying Article 10c of the Directive and without prejudice to the first sentence of Article 10c(2) of the Directive, the total quantity of allowances to be auctioned in a given year following the adjustment set out in the second column of the table in Annex IV to this Regulation shall not be lower than the quantity of allowances to be transitionally allocated free of charge to installations for electricity production in that same year.

If necessary, the total quantity of allowances to be auctioned in a given year in the period 2014-16 by a Member State applying Article 10c of the Directive shall be increased accordingly. To the extent that the total quantity of allowances to be auctioned is increased in accordance with the previous sentence, it shall subsequently be reduced to ensure that the distribution pursuant to the first subparagraph of this paragraph is complied with. The volumes of allowances to be auctioned referred to in the second and third column of the table in Annex IV to this Regulation shall be adjusted to reflect any such increase and reduction.

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Any quantity to be auctioned pursuant to Article 24 of Directive 2003/87/EC shall be added to the volume of allowances to be auctioned in a given calendar year, determined pursuant to the first or second subparagraphs of this paragraph.

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Without prejudice to Decision (EU) 2015/1814 of the European Parliament and of the Council ( 8 ), the volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in the final year of each trading period shall take account of any cessation of operations of an installation pursuant to Article 10a(19) of that Directive, any adaptation of the level of free allocation pursuant to Article 10a(20) of that Directive and of allowances remaining in the reserve for new entrants provided for in Article 10a(7) of that Directive.

3. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned each calendar year as from 2013 shall be based on Annex I and on the Commission's determination and publication pursuant to Article 10(1) of that Directive of the estimated amount of allowances to be auctioned or on the most recent amendment of the Commission's original estimate as published by 31 January of the preceding year, taking into account Decision (EU) 2015/1814 where relevant and to the extent possible any transitional free allocations deducted or to be deducted from the quantity of allowances that a given Member State would otherwise auction pursuant to Article 10(2) of Directive 2003/87/EC as provided for in Article 10c(2) of that Directive, as well as any adjustment pursuant to Articles 24 and 27 of that Directive.

Without prejudice to Decision (EU) 2015/1814, any subsequent change to the volume of allowances to be auctioned in a given calendar year shall be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

4. Without prejudice to Article 10a(7) of Directive 2003/87/EC, for any given calendar year each Member State's share of allowances to be auctioned covered by Chapter III of that Directive shall be the share determined pursuant to Article 10(2) of the same Directive, taking into account any transitional free allocation made by that Member State pursuant to Article 10c of Directive 2003/87/EC in that calendar year, any allowances to be auctioned by that Member State in the same calendar year pursuant to Article 24 of that Directive, as well as the allowances to be placed in or released from the market stability reserve pursuant to the second subparagraph of Article 1(5) and to Article 1(8) of Decision (EU) 2015/1814.

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Article 11

Calendar for individual auctions of allowances covered by Chapter III of Directive 2003/87/EC auctioned by auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation

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1. The auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation shall determine and publish the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in individual auctions each calendar year, by 30 June of the previous year or as soon as practicable thereafter, having previously consulted the Commission and obtained its opinion thereon. The auction platforms concerned shall take the utmost account of the Commission's opinion.

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2. The auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation shall make their determinations and publications as provided in paragraph 1 of this Article in accordance with Annex I and the Commission’s determination and publication of the estimated amount of allowances to be auctioned or the most recent amendment of the Commission’s original estimate, including any adjustment, referred to in Article 10(3).

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3. The bidding windows, individual volumes and auction dates of the allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in individual auctions for the final year of each trading period, may be adjusted by the auction platform concerned to take account of any cessation of operations of an installation pursuant to Article 10a(19) of that Directive, any adaptation of the level of free allocation pursuant to Article 10a(20) of that Directive or allowances remaining in the reserve for new entrants provided for in Article 10a(7) of that Directive.

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4. The calendar for individual auctions of allowances covered by Chapter III of Directive 2003/87/EC conducted by an auction platform other than the auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation shall be determined and published pursuant to Article 32 of this Regulation.

Article 32 shall also apply with respect to the auctions conducted pursuant to the second subparagraph of Article 30(7) by the auction platform appointed pursuant to Article 26(1) or (2).

Article 12

Annual volumes of auctioned allowances covered by Chapter II of Directive 2003/87/EC

1. The volume of allowances covered by Chapter II of Directive 2003/87/EC to be auctioned each year shall be 15 % of the expected volume of those allowances in circulation for that year. Where the auctioned volume in a given year is more or less than 15 % of the volume actually put in circulation for that year, the volume to be auctioned in the subsequent year shall correct for the difference. Any allowances that remain to be auctioned after the last year of a trading period shall be auctioned in the first four months of the subsequent year.

The volume of allowances to be auctioned in the final year of each trading period shall take account of allowances remaining in the special reserve referred to in Article 3f of Directive 2003/87/EC.

2. For each calendar year in a given trading period, each Member State’s share of allowances to be auctioned covered by Chapter II of Directive 2003/87/EC shall be determined in accordance with Article 3d(3) of that Directive.

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Article 13

Calendar for individual auctions of allowances covered by Chapter II of Directive 2003/87/EC auctioned by auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation

1. The auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation shall determine and publish the bidding windows, individual volumes and auction dates of the allowances covered by Chapter II of Directive 2003/87/EC to be auctioned in individual auctions for 2012, by 30 September 2011, or as soon as practicable thereafter, having previously consulted the Commission and obtained its opinion thereon. The auction platforms concerned shall take the utmost account of the Commission’s opinion.

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2. As from 2013, the auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation shall in principle determine and publish the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances covered by Chapter II of Directive 2003/87/EC to be auctioned in individual auctions for each calendar year by 30 September of the previous year, or as soon as practicable thereafter, having previously consulted the Commission and obtained its opinion thereon. The auction platforms concerned shall take the utmost account of the Commission’s opinion.

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The bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances covered by Chapter II of Directive 2003/87/EC to be auctioned in individual auctions for the final year of each trading period, may be adjusted by the auction platform concerned to take account of allowances remaining in the special reserve referred to in Article 3f of that Directive.

3. The auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation shall base their determinations and publications under paragraphs 1 and 2 on the Commission’s decision adopted pursuant to Article 3e(3) of Directive 2003/87/EC.

4. The provisions on the calendar for individual auctions of allowances covered by Chapter II of Directive 2003/87/EC conducted by an auction platform other than the auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation shall be determined and published pursuant to Article 32 of this Regulation.

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Article 32 shall also apply with respect to the auctions conducted pursuant to the second subparagraph of Article 30(7) by the auction platform appointed pursuant to Article 26(1) or (2).

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Article 14

Adjustments of the auction calendar

1. The determinations and publications of the annual volumes to be auctioned and of the bidding windows, volumes, dates, auctioned product, payment and delivery dates in connection with individual auctions pursuant to Articles 10 to 13 and Article 32(4) shall not be modified except for adjustments due to any of the following:

(a) the cancellation of an auction pursuant to Article 7(5) and (6), Article 9 and Article 32(5);

(b) any suspension of an auction platform other than the auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation provided for in the Commission regulation adopted pursuant to Article 19(3) of Directive 2003/87/EC;

(c) any decision by a Member State made pursuant to Article 30(8);

(d) any settlement failure referred to in Article 45(5);

(e) any allowances remaining in the special reserve referred to in Article 3f of Directive 2003/87/EC;

(f) the cessation of operations of an installation pursuant to Article 10a(19) of Directive 2003/87/EC, any adaptation of the level of free allocation pursuant to Article 10a(20) of that Directive or allowances remaining in the reserve for new entrants provided for in Article 10a(7) of that Directive;

(g) any unilateral inclusion of additional activities and gases pursuant to Article 24 of Directive 2003/87/EC;

(h) any measures adopted pursuant to Article 29a of Directive 2003/87/EC;

(i) the entry into force of amendments to this Regulation or to Directive 2003/87/EC;

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(j) any withholding of allowances from the auctions pursuant to Article 22(5) or the second subparagraph of Article 24(1);

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(k) the necessity for an auction platform to avoid conducting an auction in breach of this Regulation or Directive 2003/87/EC;

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(l) adjustments necessary pursuant to Decision (EU) 2015/1814 which shall be determined and published by 15 July of the given year, or as soon as practicable thereafter.

▼B

2. Where the manner in which a modification is to be implemented is not provided for in this Regulation, the auction platform concerned shall not implement that modification until it has previously consulted the Commission and obtained its opinion thereon. The auction platform concerned shall take the utmost account of the Commission’s opinion.







CHAPTER IV

ACCESS TO THE AUCTIONS

Article 15

Persons who may submit bids directly in an auction

Without prejudice to Article 28(3), only a person who is eligible to apply for admission to bid pursuant to Article 18 and is admitted to bid pursuant to Articles 19 and 20 may submit bids directly in an auction.

Article 16

Means of access

1. An auction platform shall provide for the means to access its auctions on a non-discriminatory basis.

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1a. Admission to the auctions shall not be dependent on becoming a member of or a participant in the secondary market organised by the auction platform or any other trading place operated by the auction platform or by any third party.

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2. An auction platform appointed pursuant to Article 26(1) or 30(1) shall ensure that its auctions can be accessed remotely by means of an electronic interface accessible securely and reliably through the Internet.

In addition, an auction platform appointed pursuant to Article 26(1) or 30(1) shall offer bidders the option of accessing its auctions through dedicated connections to the electronic interface.

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3. An auction platform may offer, and Member States may require an auction platform to offer, one or more alternative means of accessing its auctions, should the main means of access be inaccessible for whatever reason, provided that such alternative means of access are secure and reliable and their use does not lead to any discrimination between bidders.

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Article 17

Training and helpline

An auction platform appointed pursuant to Article 26(1) or 30(1) shall offer a practical web-based training module on the auction process it is conducting, including guidance on how to complete and submit any forms and a simulation of how to bid in an auction. It shall also make available a helpline service accessible by telephone, facsimile and electronic mail at least during the working hours of each trading day.

▼B

Article 18

Persons eligible to apply for admission to bid

1. The following persons shall be eligible to apply for admission to bid directly in auctions:

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(a) an operator or an aircraft operator having an operator holding account or an aircraft operator holding account, bidding on its own account, including any parent undertaking, subsidiary undertaking or affiliate undertaking forming part of the same group of undertakings as the operator or the aircraft operator;

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(b) investment firms authorised under Directive 2004/39/EC bidding on their own account or on behalf of their clients;

(c) credit institutions authorised under Directive 2006/48/EC bidding on their own account or on behalf of their clients;

(d) business groupings of persons listed in point (a) bidding on their own account and acting as an agent on behalf of their members;

(e) public bodies or state-owned entities of the Member States that control any of the persons listed in point (a).

2. Without prejudice to the exemption in Article 2(1)(i) of Directive 2004/39/EC, persons covered by this exemption and authorised pursuant to Article 59 of this Regulation shall be eligible to apply for admission to bid directly in the auctions either on their own account or on behalf of clients of their main business provided that a Member State where they are established has enacted legislation enabling the relevant competent national authority in that Member State to authorise them to bid on their own account or on behalf of clients of their main business.

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3. Persons referred to in paragraph 1(b) or (c) shall be eligible to apply for admission to bid directly in the auctions on behalf of their clients when bidding for auctioned products that are not financial instruments provided that a Member State in which they are established has enacted legislation enabling the relevant competent national authority in that Member State to authorise them to bid on behalf of their clients.

▼B

4. Where the persons referred to in paragraph 1(b) and (c) and paragraph 2 bid on behalf of their clients, they shall ensure that those clients are themselves eligible to apply for admission to bid directly under paragraphs 1 or 2.

Where the clients of the persons referred to in the first subparagraph are themselves bidding on behalf of their own clients, they shall ensure that those clients are also eligible to apply for admission to bid directly under paragraphs 1 or 2. The same shall apply to all further clients down the chain bidding indirectly in the auctions.

5. The following persons shall not be eligible to apply for admission to bid directly in auctions nor may they participate in auctions through one or more persons admitted to bid pursuant to Articles 19 and 20, whether for their own account or on behalf of any other person, where they fulfil their role with respect to the auctions in question:

(a) the auctioneer;

(b) the auction platform including any clearing system and any settlement system connected to it;

(c) persons who are in a position to exercise, directly or indirectly, significant influence over the management of the persons under points (a) and (b);

(d) persons working for persons under points (a) and (b).

6. The auction monitor may not participate in any auction directly or indirectly through one or more persons admitted to bid pursuant to Articles 19 and 20 whether for its own account or on behalf of any other person.

Persons who are in a position to exercise, directly or indirectly, significant influence over the management of the auction monitor may not participate in any auction directly or indirectly, through one or more persons admitted to bid pursuant to Articles 19 and 20, whether for their own account or on behalf of any other person.

Persons working for the auction monitor in connection with the auctions may not participate in any auction directly or indirectly, through one or more persons admitted to bid pursuant to Articles 19 and 20, whether for their own account or on behalf of any other person.

7. The option made available pursuant to Articles 44 to 50 for an auction platform, including any clearing system or settlement system connected to it, to accept payment, make delivery or take collateral, from a successor in title to a successful bidder shall not undermine the application of Articles 17 to 20.

Article 19

Requirements for admission to bid

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1. Members or participants of the secondary market organised by an auction platform appointed pursuant to Article 26(1) or 30(1) that are eligible persons pursuant to Article 18(1) or (2) shall be admitted to bid directly in the auctions conducted by that auction platform without any further admission requirements, provided that all of the following conditions are fulfilled:

(a) the requirements for admission of the member or participant to trade allowances through the secondary market organised by the auction platform appointed pursuant to Article 26(1) or 30(1) are no less stringent than those listed under paragraph 2 of this Article;

(b) the auction platform appointed pursuant to Article 26(1) or 30(1) receives any additional information necessary to verify the fulfilment of any requirements referred to in paragraph 2 of this Article that have not been previously verified.

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2. Persons, who are not members or participants of the secondary market organised by an auction platform appointed pursuant to Article 26(1) or 30(1), and that are eligible persons pursuant to Article 18(1) or (2) shall be admitted to bid directly in the auctions conducted by that auction platform provided that they:

(a) are established in the Union, an operator or an aircraft operator;

(b) hold a nominated holding account;

(c) hold a nominated bank account;

(d) appoint at least one bidder’s representative as defined in the third subparagraph of Article 6(3);

(e) satisfy the auction platform concerned in line with applicable customer due diligence measures as to their identity, the identity of their beneficial owners, integrity, business and trading profile having regard to the means of establishing the relationship with the bidder, the type of bidder, the nature of the auctioned product, the size of prospective bids, and the means of payment and delivery;

(f) satisfy the auction platform concerned of their financial standing, in particular, that they are able to meet their financial commitments and current liabilities as they fall due;

(g) have in place or are able to put in place when requested, the internal processes, procedures and contractual agreements necessary to give effect to a maximum bid-size imposed pursuant to Article 57;

(h) fulfil the requirements of Article 49(1).

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▼B

3. Persons falling under the scope of Article 18(1)(b) and (c) or Article 18(2) submitting bids on behalf of their clients shall be responsible for ensuring that all of the following conditions are fulfilled:

(a) their clients are eligible persons pursuant to Article 18(1) or (2);

(b) they have or will have in good time before the opening of the bidding window adequate internal processes, procedures and contractual agreements necessary to:

(i) enable them to process bids from their clients including the submission of bids, collection of payment and transfer of allowances;

(ii) prevent the disclosure of confidential information from that part of their business responsible for receiving, preparing and submitting bids on behalf of their clients to that part of their business responsible for preparing and submitting bids on their own account;

(iii) ensure that their clients who themselves are acting on behalf of clients bidding in the auctions apply the requirements set out in paragraph 2 of this Article and in this paragraph and that they require the same of their clients and of the clients of their clients as provided for in Article 18(4).

The auction platform concerned may rely on reliable checks carried out by the persons referred to in the first subparagraph of this paragraph, their clients, or the clients of their clients as provided for in Article 18(4).

Persons referred to in the first subparagraph of this paragraph shall be responsible for ensuring that they are able to demonstrate to the auction platform whenever requested to do so by the auction platform pursuant to Article 20(5)(d) that the conditions in points (a) and (b) of the first subparagraph of this paragraph are fulfilled.

Article 20

Submission and processing of applications for admission to bid

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1. Before submitting their first bid directly through any auction platform appointed pursuant to Article 26(1) or 30(1), persons eligible under Article 18(1) or (2) shall apply to the auction platform concerned for admission to bid.

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Members of or participants in the secondary market organised by the auction platform concerned fulfilling the requirements of Article 19(1) shall be admitted to bid without applying under the first subparagraph of this paragraph.

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2. An application for admission to bid made under paragraph 1 shall be made by submitting a completed application form to the auction platform. The application form and its access through the internet shall be provided and maintained by the auction platform concerned.

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3. An application for admission to bid shall be supported by duly certified copies of all supporting documents required by the auction platform to show that the applicant satisfies the requirements of Article 19(2) and (3). An application for admission to bid shall at least include the elements listed in Annex II.

4. An application for admission to bid, including any supporting documents, shall upon request be made available for inspection by the auction monitor, the competent national law enforcement authorities of a Member State conducting an investigation, referred to in Article 62(3)(e) and any competent Union bodies involved in investigations conducted on a cross-border basis.

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5. An auction platform appointed pursuant to Article 26(1) or 30(1) may refuse admission to bid in its auctions if the applicant refuses any of the following:

(a) to comply with requests made by the auction platform for additional information or clarification or substantiation of information provided;

(b) to attend an invitation made by the auction platform to interview any officers of the applicant including at its business premises or elsewhere;

(c) to allow investigations or verifications, requested by the auction platform including on-site visits or spot-checks at the applicant’s business premises;

(d) to comply with requests made by the auction platform for any information required from an applicant, the clients of an applicant or the clients of their clients as provided for in Article 18(4) to check compliance with the requirements of Article 19(3);

(e) to comply with requests made by the auction platform for any information required to check compliance with the requirements of Article 19(2).

6. An auction platform appointed pursuant to Article 26(1) or 30(1) shall apply the measures provided for in Article 13(4) of Directive 2005/60/EC in respect of its transactions or business relationships with politically exposed persons irrespective of their country of residence.

7. An auction platform appointed pursuant to Article 26(1) or 30(1) shall require an applicant for admission to bid in its auctions to ensure that clients of the applicant comply with any request made pursuant to paragraph 5 and that any client of the applicant’s clients as provided for in Article 18(4) does the same.

▼B

8. An application for admission shall be deemed to be withdrawn if the applicant fails to submit information requested by an auction platform within a reasonable period specified in a request for information made pursuant to point (a), (d) or (e) of paragraph 5, by the auction platform concerned, which shall not be less than five trading days from the date of the request for information, or fails to respond or submit to or cooperate in an interview or any investigations or verifications under point (b) or (c) of paragraph 5.

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9. An applicant shall not provide any auction platform appointed pursuant to Article 26(1) or 30(1), with false or misleading information. An applicant shall notify the auction platform concerned fully, frankly and promptly of any changes in its circumstances that could affect its application for admission to bid in auctions conducted by that auction platform or any admission to bid already granted to it.

10. An auction platform appointed pursuant to Article 26(1) or 30(1) shall decide on an application submitted to it and notify its decision to the applicant.

The auction platform concerned may:

(a) grant unconditional admission to the auctions for a period not exceeding the term of its appointment, including any extension or renewal of that appointment;

(b) grant conditional admission to the auctions for a period not exceeding the term of its appointment, subject to fulfilment of the specified conditions, by a given date, which shall be duly verified by the auction platform concerned;

(c) refuse to grant admission.

▼B

Article 21

Refusal, revocation or suspension of admission

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1. An auction platform appointed pursuant to Article 26(1) or 30(1) shall refuse to grant admission to bid in its auctions, revoke or suspend any admission to bid already granted to any person who:

(a) is not or is no longer eligible to apply for admission to bid under Article 18(1) or (2);

(b) does not or no longer meets the requirements of Articles 18, 19 and 20;

(c) is wilfully or repeatedly in breach of this Regulation, the terms and conditions of its admission to bid in the auctions conducted by the auction platform concerned or any other related instructions or agreements.

2. An auction platform appointed pursuant to Article 26(1) or 30(1) shall refuse to grant admission to bid in its auctions, revoke or suspend any admission to bid already granted, if it suspects money laundering, terrorist financing, criminal activity or market abuse in relation to an applicant, provided that such refusal, revocation or suspension is unlikely to frustrate efforts by the competent national authorities, to pursue or apprehend the perpetrators of such activities.

In such a case, the auction platform concerned shall make a report to the financial intelligence unit (FIU) referred to in Article 21 of Directive 2005/60/EC in accordance with Article 55(2) of this Regulation.

3. An auction platform appointed pursuant to Article 26(1) or 30(1) may refuse to grant admission to bid in its auctions, revoke or suspend any admission to bid already granted, to any person:

(a) who is negligently in breach of this Regulation, the terms and conditions of its admission to bid in the auctions conducted by the auction platform concerned or any other related instructions or agreements;

(b) who has otherwise behaved in a manner that is prejudicial to the orderly or efficient conduct of an auction;

(c) who is referred to in Article 18(1)(b) or (c) or Article 18(2) and has not bid in any auction during the preceding 220 trading days.

▼B

4. Persons referred to in paragraph 3 shall be notified of the refusal to grant admission, or the revocation or suspension of admission, and be given a reasonable period, specified in the decision of refusal to admit, revocation or suspension of admission, to respond in writing.

After considering the person’s written response, the auction platform concerned shall if warranted:

(a) grant or reinstate admission with effect from a given date;

(b) grant conditional admission or conditional reinstatement of admission subject to fulfilment of the specified conditions by a given date, which shall be duly verified by the auction platform concerned;

(c) confirm the refusal to grant admission, the revocation or suspension of admission with effect from a given date.

The auction platform shall notify the person in question of its decision.

5. Persons whose admission to bid is revoked or suspended pursuant to paragraphs 1, 2 or 3 shall take reasonable steps to ensure that their removal from the auctions:

(a) is orderly;

(b) does not prejudice the interests of their clients or interfere with the efficient functioning of the auctions;

(c) does not affect their obligations to comply with any payment provisions, the terms and conditions of their admission to bid in the auctions or any other related instructions or agreements;

(d) does not compromise their obligations regarding the protection of confidential information pursuant to Article 19(3)(b)(ii) which shall remain in force for 20 years following their removal from the auctions.

The refusal to grant admission, the revocation or suspension of admission, referred to in paragraphs 1, 2 and 3, shall specify any measures needed to comply with this paragraph and the auction platform shall verify compliance with such measures.







CHAPTER V

APPOINTMENT OF THE AUCTIONEER AND ITS FUNCTIONS

Article 22

Appointment of the auctioneer

1. Each Member State shall appoint an auctioneer. No Member State shall auction allowances without appointing an auctioneer. More than one Member State may appoint the same auctioneer.

2. The auctioneer shall be appointed by the appointing Member State in good time prior to the commencement of the auctions so as to conclude and implement the necessary arrangements with the auction platform appointed or to be appointed by that Member State, including any clearing system and settlement system connected to it, allowing the auctioneer to auction allowances on behalf of the appointing Member State upon mutually agreed terms and conditions.

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3. For Member States not participating in the joint actions as provided in Article 26(1) and (2), the auctioneer shall be appointed by the appointing Member State so as to conclude and implement the necessary arrangements with the auction platforms appointed pursuant to Article 26(1) and (2), including any clearing system and settlement system connected to them, to enable the auctioneer to auction allowances on behalf of the appointing Member State on such auction platforms upon mutually agreed terms and conditions, pursuant to the second subparagraph of Article 30(7) and the first subparagraph of Article 30(8).

4. Member States shall refrain from disclosing inside information to persons working for the auctioneer unless the person working or acting for the Member State makes such disclosure on a need-to-know basis in the normal course of the exercise of their employment, profession or duties and the Member State concerned is satisfied that the auctioneer has in place appropriate measures to prevent insider dealing, within the meaning of Article 3(28) or as prohibited by Article 38, by any person working for an auctioneer, additional to the measures foreseen in Article 42(1) and (2).

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5. The allowances to be auctioned on behalf of a Member State shall be withheld from the auctions whenever that Member State does not have in place a duly appointed auctioneer or whenever the arrangements referred to in paragraph 2 are not concluded or in force.

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6. Paragraph 5 is without prejudice to any legal consequences arising under Union law from a Member State failing to fulfil its obligations under paragraphs 1 to 4.

7. Member States shall notify the identity of the auctioneer and its contact details to the Commission.

The auctioneer’s identity and contact details shall be published on the Commission’s website.

Article 23

The auctioneer’s functions

The auctioneer shall:

(a) auction the volume of allowances to be auctioned by each Member State appointing it;

(b) receive the auction proceeds due to each Member State appointing it;

(c) disburse the auction proceeds due to each Member State appointing it.







CHAPTER VI

APPOINTMENT OF THE AUCTION MONITOR AND ITS FUNCTIONS

Article 24

The auction monitor

1. All auction processes shall be monitored by the same auction monitor.

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Without prejudice to the third subparagraph, the allowances to be auctioned on behalf of a Member State shall be withheld from the auctions whenever that Member State does not have in place a duly appointed auction monitor or whenever the contractual arrangements with the auction monitor are not concluded or in force.

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Where reasons of force majeure prevent the auction monitor from performing its tasks in respect of a given auction, in full or in part, the auction platform concerned may decide to conduct that auction provided that it takes appropriate measures to ensure adequate monitoring of the auction itself. The foregoing shall also apply until the moment that the first auction monitor appointed pursuant to paragraph 2 starts monitoring the auctions concerned as more particularly specified in the contract appointing it.

▼B

2. All Member States shall appoint an auction monitor following a joint procurement procedure between the Commission and the Member States conducted pursuant to the third subparagraph of Article 91(1) of Regulation (EC, Euratom) No 1605/2002 and Article 125c of Regulation (EC, Euratom) No 2342/2002.

3. The period for which the auction monitor is appointed shall be no longer than 5 years.

At least three months prior to the expiry of the term of appointment or termination of the appointment of the auction monitor, a successor shall be appointed, pursuant to paragraph 2.

4. The identity and contact details of the auction monitor shall be published on the Commission’s website.

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5. Any Member State that joins the joint action referred to in paragraph 2 after the entry into force of the joint procurement agreement entered into between the Member States and the Commission shall accept the terms and conditions agreed by the Member States and the Commission in the joint procurement agreement as well as any decisions already adopted under that agreement.

After the entry into force of the joint procurement agreement and until a Member State joins the joint action referred to in paragraph 2, it may be given observer status upon terms and conditions agreed in the joint procurement agreement between the Member States and the Commission subject to any applicable public procurement rules.

▼B

Article 25

The auction monitor’s functions

1. The auction monitor shall monitor each auction and report on the proper implementation of the auctions conducted in the preceding month to the Commission on behalf of the Member States and to the Member States concerned, within the deadline provided for in the fourth subparagraph of Article 10(4) of Directive 2003/87/EC, pursuant to that subparagraph in particular with respect to:

(a) fair and open access;

(b) transparency;

(c) price formation;

(d) technical and operational aspects.

2. The auction monitor shall provide to the Member States and the Commission an annual consolidated report which shall comprise:

(a) the matters referred to in paragraph 1 both in relation to each individual auction and in aggregate for each auction platform;

(b) any failure to comply with the contract appointing an auction platform;

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(c) any evidence of anti-competitive behaviour, market abuse, money laundering, terrorist financing or criminal activity;

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(d) the impact of the auctions on the market position of the auction platforms on the secondary market, if any;

(e) the relationship between the auction processes covered in the consolidated report and between them and the functioning of the secondary market, pursuant to Article 10(5) of Directive 2003/87/EC;

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(f) information about the number, nature and status of any complaints made pursuant to Articles 59(4) or 64(1) as well as any complaints made against an auction platform to the national competetent authorities supervising that auction platform, the courts or competent administrative bodies provided for in the national measures transposing Article 52(2) of Directive 2004/39/EC;

▼B

(g) information about any follow-up given to any reports of the auction monitor made under paragraphs 3, 4 and 5;

(h) any recommendations deemed appropriate to improve any of the auction processes or for any review of the following:

(i) this Regulation including the review referred to in Article 33;

(ii) the Commission regulation adopted pursuant to Article 19(3) of Directive 2003/87/EC;

(iii) Directive 2003/87/EC including the review of the functioning of the carbon market provided for in Articles 10(5) and 12(1a) of that Directive.

3. The auction monitor may, upon request by the Commission and one or more Member State(s), or as required in paragraph 5, report from time to time on any specific issue related to any of the auction processes, whenever it is necessary to raise the issue in question prior to the submission of the reports covered in paragraphs 1 or 2. Otherwise the auction monitor may report thereon in the reports provided for in paragraphs 1 or 2.

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4. A Member State not participating in the joint action as provided in Article 26(1) and (2) of this Regulation but opting to appoint its own auction platform pursuant to Article 30(1) and (2) of this Regulation may request the auction monitor to provide the Member States, the Commission and the auction platform concerned with a technical report on the ability of the auction platform it proposes or intends to propose, to carry out the auction process in accordance with the requirements of this Regulation and in conformity with the objectives set out in Article 10(4) of Directive 2003/87/EC.

▼B

In such reports, the auction monitor shall clearly state where the auction process meets the requirements of the first subparagraph and where it does not. It shall make precise recommendations for further development or improvement to the auction process wherever appropriate, proposing a specific timeline for their implementation.

5. In the event of any breach of this Regulation or non-conformity with the objectives of Article 10(4) of Directive 2003/87/EC of the auction process carried out by an auction platform, or upon request by the Commission in case it suspects such a breach, the auction monitor shall report forthwith to the Member States, the Commission and the auction platform concerned.

The report shall clearly state the nature of the breach or non-conformity. It shall make precise recommendations to remedy the situation, proposing a specific timeline for their implementation. Where appropriate, it may recommend the suspension of the auction platform concerned. The auction monitor shall keep its report pursuant to this paragraph under constant review and provide quarterly up-dates thereon to the Member States, the Commission and the auction platform concerned.

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6. The auction monitor shall provide opinions pursuant to Articles 7(7), 8(3), 27(3) and 31(1) and as provided in Annex III. Opinions shall be delivered within a reasonable time.

▼B

7. The reports and opinions provided for pursuant to this Article shall be drawn up in a comprehensible, standardised easily accessible format to be determined as set out in the contract appointing the auction monitor.







CHAPTER VII

APPOINTMENT OF AN AUCTION PLATFORM BY MEMBER STATES PARTICIPATING IN A JOINT ACTION WITH THE COMMISSION AND ITS FUNCTIONS

Article 26

Appointment of an auction platform through joint action of the Member States with the Commission

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1. Without prejudice to Article 30, Member States shall appoint an auction platform to auction allowances pursuant to Article 27 following a joint procurement procedure between the Commission and the Member States participating in the joint action pursuant to this Article.

2. Without prejudice to Article 30, Member States shall appoint an auction platform to auction allowances pursuant to Article 28 following a joint procurement procedure between the Commission and the Member States participating in the joint action pursuant to this Article.

An auction platform appointed pursuant to the first subparagraph of this paragraph shall auction allowances pursuant to Article 28 until the commencement of the auctions on an auction platform appointed pursuant to paragraph 1.

▼B

3. The joint procurement procedure referred to in paragraphs 1 and 2 shall be conducted pursuant to the third subparagraph of Article 91(1) of Regulation (EC, Euratom) No 1605/2002 and Article 125c of Regulation (EC, Euratom) No 2342/2002.

4. Any period of appointment of the auction platforms referred to in paragraphs 1 and 2 shall be no longer than five years.

5. The identity and contact details of the auction platforms referred to in paragraphs 1 and 2 shall be published on the Commission’s website.

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6. Any Member State that joins the joint actions as provided in paragraphs 1 and 2 after the entry into force of the joint procurement agreement entered into between the Commission and the Member States participating in that action shall accept the terms and conditions agreed by the Commission and the Member States joining the joint action prior to the entry into force of that agreement as well as any decisions already adopted under that agreement.

Any Member State that decides pursuant to Article 30(4) not to participate in the joint action as provided in paragraphs 1 and 2 but to appoint its own auction platform may be given observer status upon terms and conditions agreed in the joint procurement agreement between the Member States participating in the joint action as provided in paragraphs 1 and 2 and the Commission subject to any applicable public procurement rules.

▼B

Article 27

Functions of the auction platform appointed pursuant to Article 26(1)

1. The auction platform appointed pursuant to Article 26(1) shall provide the following services to the Member States as more particularly delineated in the contract appointing it:

(a) providing access to the auctions, pursuant to Articles 15 to 21, including the provision and maintenance of the necessary internet-based electronic interfaces and website;

(b) conducting the auctions in accordance with Articles 4 to 7;

(c) managing the auction calendar in accordance with Articles 8 to 14;

(d) announcing and notifying the results of an auction, pursuant to Article 61;

(e) providing, or ensuring ►M1 ————— ◄ the provision of, the requisite clearing system or settlement system needed for:

(i) the handling of payments made by successful bidders or their successors in title and distribution of the proceeds of the auctions to the auctioneer, pursuant to Articles 44 and 45;

(ii) delivering the auctioned allowances to successful bidders or their successors in title, pursuant to Articles 46, 47 and 48;

(iii) managing collateral including any margining, provided by the auctioneer or bidders, pursuant to Articles 49 and 50;

(f) providing the auction monitor with any information relating to the conduct of the auctions, required for the carrying out of the auction monitor’s functions, pursuant to Article 53;

(g) ►M1 surveying ◄ the auctions, notifying suspicions of money laundering, terrorist financing, criminal activity or market abuse, administering any required remedial measures or sanctions including the provision of an extra-judicial dispute resolution mechanism, pursuant to ►M1 Article 54 ◄ to 59 and Article 64(1).

2. At least 20 trading days prior to the opening of the first bidding window run by the auction platform appointed pursuant to Article 26(1), the auction platform shall be connected to at least one clearing system or settlement system.

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3. Within three months from the date of its appointment, the auction platform shall submit its detailed exit strategy to the Commission, who will consult the auction monitor thereon. Within two months from the date of receipt of the auction monitor’s opinion pursuant to Article 25(6), the auction platform shall review, and where appropriate amend, its exit strategy, taking the utmost account of that opinion.

▼B

Article 28

Functions of the auction platform appointed pursuant to Article 26(2)

1. An auction platform appointed pursuant to Article 26(2) shall provide the following services to the Member States:

(a) providing access to the auctions pursuant to the arrangements in place in the secondary market, organised by the auction platform, as modified in the contracts appointing it;

(b) conducting the auctions in accordance with Articles 4 to 7;

(c) managing the auction calendar in accordance with Articles 8 to 14;

(d) announcing and notifying the results of an auction, pursuant to Article 61;

(e) providing, pursuant to the arrangements in place in the secondary market organised by the auction platform, ►M1 without prejudice to Articles 44 to 50 ◄ , as modified in the contract appointing it, the clearing system or settlement system needed for the:

(i) handling of payments made by bidders or their successors in title and the distribution of the proceeds of the auctions to the auctioneer;

(ii) delivering auctioned allowances to successful bidders or their successors in title;

(iii) managing collateral, including any margining, provided by the auctioneer or bidders;

(f) providing the auction monitor with any information relating to the conduct of the auctions, required for the carrying out of the auction monitor’s functions, pursuant to Article 53;

(g) surveying the auctions, notifying suspicions of money laundering, terrorist financing, criminal activity or market abuse, administering any required remedial measures or sanctions, including the provision of an extra-judicial dispute resolution mechanism, pursuant to the arrangements in place in the secondary market organised by the auction platform, as modified in the contract appointing it.

2. At least 20 trading days prior to the opening of the first bidding window run by an auction platform appointed pursuant to Article 26(2), the auction platform concerned shall be connected to at least one clearing system or settlement system.

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3. Without prejudice to paragraphs 4 and 5, Article 16(2) and (3), Articles 17 and 19 to 21, Articles 36 to 43, Articles 54 to 56, Articles 60(3) and 63(4), and Article 64 shall not apply with respect to the auctions conducted by an auction platform appointed pursuant to Article 26(2) or 30(2).

4. Paragraph 3 shall not preclude Article 36(1) from being applicable with respect to the auctions of allowances in the form of two-day spot or five-day futures that are a financial instrument within the meaning of Article 1(3) of Directive 2003/6/EC conducted by an auction platform appointed pursuant to Article 26(2) or 30(2), where the Member State where the auction platform is established has implemented Article 36(1) of this Regulation or where such implementation is not necessary for the application of Article 36(1) of this Regulation.

5. Paragraph 3 shall not preclude Article 36(2) and Articles 37 to 43 from being applicable with respect to the auctions of allowances in the form of two-day spot or five-day futures that are not a financial instrument within the meaning of Article 1(3) of Directive 2003/6/EC conducted by an auction platform appointed pursuant to Article 26(2) or 30(2) where the Member State where the auction platform is established has implemented Article 43 of this Regulation or where such implementation is not necessary for the application of Article 43 of this Regulation.

▼B

Article 29

Services provided to the Commission by the auction platforms appointed pursuant to Article 26(1) or (2)

Auction platforms appointed pursuant to Article 26(1) or (2) shall provide the Commission with technical support services with respect to the Commission’s work relating to the following:

(a) completion of Annex I and any coordination of the auction calendar for Annex III;

(b) any opinions provided by the Commission under this Regulation;

(c) any opinions or reports provided by the auction monitor regarding the functioning of the auctions platforms appointed pursuant to Article 26(1) or (2);

(d) the reports or any proposal made by the Commission pursuant to Articles 10(5) and 12(1a) of Directive 2003/87/EC;

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▼B

(f) any review of this Regulation, Directive 2003/87/EC or the Commission regulation adopted pursuant to Article 19(3) of that Directive which has an impact on the functioning of the carbon market including the implementation of the auctions;

(g) any other joint action relating to the functioning of the carbon market including the implementation of the auctions agreed between the Commission and the Member States participating in the joint action.







CHAPTER VIII

APPOINTMENT OF AUCTION PLATFORMS BY MEMBER STATES OPTING TO HAVE THEIR OWN AUCTION PLATFORM AND THEIR FUNCTIONS

Article 30

Appointment of any auction platform other than an auction platform appointed pursuant to Article 26(1) or (2)

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1. Any Member State not participating in the joint action as provided in Article 26(1) and (2) may appoint its own auction platform for the auctioning of its share of the volume of allowances covered by Chapters II and III of Directive 2003/87/EC to be auctioned as provided for in Article 31(1) of this Regulation.

2. Any Member State not participating in the joint action as provided in Article 26(1) and (2) may appoint its own auction platform for the auctioning of its share of the volume of allowances covered by Chapters II and III of Directive 2003/87/EC to be auctioned as provided for in Article 31(2) of this Regulation.

3. Member States not participating in the joint action as provided in Article 26(1) and (2) may appoint the same auction platform or separate auction platforms for the auctioning pursuant to Article 31(1) and (2) respectively.

4. Any Member State not participating in the joint action as provided in Article 26(1) and (2), shall inform the Commission of its decision not to participate in the joint action as provided in Article 26(1) and (2) but to appoint its own auction platform pursuant to paragraphs 1 and 2 of this Article within 3 months of the entry into force of this Regulation.

5. Any Member State not participating in the joint action as provided in Article 26(1) and (2) shall select its own auction platform appointed pursuant to paragraphs 1 and 2 of this Article on the basis of a selection procedure compliant with Union and national procurement law where a public procurement process is required by either Union or national law, respectively. The selection procedure shall be subject to all applicable remedies and enforcement procedures under Union and national law.

Any period of appointment of the auction platform referred to in paragraph 1 and 2 shall be no longer than 3 years renewable for no more than a further 2 years. However, the term of appointment of the auction platform referred to in paragraph 2 shall expire either 3 months from the listing of the auction platform referred to in paragraph 1 pursuant to paragraph 7, 4 months from denial of that listing, or 6 months from the start of the auctions on the auction platform appointed pursuant to Article 26(1) in case the Member State has not notified pursuant to Article 30(6) an auction platform referred to in Article 30(1) by the date of the start of the auctions on the auction platform appointed pursuant to Article 26(1), whichever is the earliest.

The appointment of the auction platforms referred to in paragraphs 1 and 2 shall be subject to listing the auction platform concerned in Annex III pursuant to paragraph 7. It shall not be implemented before the entry into force of the listing of the auction platform concerned in Annex III as provided for in paragraph 7.

6. Each Member State not participating in the joint action as provided for in Article 26(1) and (2) but opting to appoint its own auction platform pursuant to paragraphs 1 and 2 of this Article shall provide the Commission with a complete notification containing all of the following:

(a) the identity of the auction platform it proposes to appoint;

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(b) the detailed operative rules that would govern the auction process to be conducted by the auction platform(s) it proposes to appoint, including the contractual provisions concerning the appointment of the auction platform concerned including any clearing system(s) and settlement system(s) connected to the proposed auction platform stipulating the terms and conditions governing the structure and level of fees, collateral management, payment and delivery;

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(c) the auctioned product and any information necessary for the Commission to assess whether the envisaged auction calendar is compatible with any prevailing or envisaged auction calendar of the auction platforms appointed pursuant to Article 26(1) or (2) as well as other auction calendars proposed by other Member States not participating in the joint action provided for in Article 26 but opting to appoint their own auction platforms;

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(d) the detailed rules and conditions on surveying and supervising the auctions to which its proposed auction platform shall be subject pursuant to Article 35(4), (5) and (6) as well as the detailed rules protecting against money laundering, terrorist financing, criminal activity or market abuse, including any remedial measures or sanctions;

(e) the detailed measures put in place to comply with Article 22(4) and Article 34 regarding the appointment of the auctioneer.

▼B

7. Auction platforms other than those appointed pursuant to Article 26(1) or (2), the Member States appointing them, their term of appointment, and any applicable conditions or obligations, shall be set out in Annex III where the requirements of this Regulation and the objectives of Article 10(4) of Directive 2003/87/EC are satisfied. The Commission and the Committee provided for in Article 23(1) of Directive 2003/87/EC shall act solely on the basis of these requirements and objectives and shall have full regard to any reports made by the auction monitor pursuant to Article 25(4) of this Regulation.

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In the absence of any listing provided for in the first subparagraph, a Member State not participating in the joint action as provided in Article 26(1) and (2) but opting to appoint its own auction platform pursuant to paragraphs 1 and 2 of this Article shall use the auction platforms appointed pursuant to Article 26(1) or (2) to auction its share of allowances that would have otherwise been auctioned on the auction platform to be appointed pursuant to paragraphs 1 or 2 of this Article in the period until the expiry of 3 months after the entry into force of the listing provided for in the first subparagraph.

Without prejudice to paragraph 8, a Member State not participating in the joint action as provided in Article 26(1) and (2) but opting to appoint its own auction platform pursuant to paragraphs 1 and 2 of this Article may nevertheless participate in the joint action for the sole purpose of being able to make use of the auction platforms appointed pursuant to Article 26(1) and (2) as provided in the second subparagraph. Such participation shall take place in accordance with the provisions of the second subparagraph of Article 26(6) and subject to the terms and conditions of the joint procurement agreement.

8. Any Member State not participating in the joint action as provided in Article 26(1) and (2) but opting to appoint its own auction platform pursuant to paragraphs 1 and 2 of this Article may join the joint action provided for in Article 26, pursuant to Article 26(6).

▼B

The volume of allowances that were scheduled to be auctioned on an auction platform other than the auction platforms appointed pursuant to Article 26(1) or (2) shall be spread evenly over the auctions conducted by the relevant auction platform appointed pursuant to Article 26(1) or (2).

Article 31

Functions of auction platforms other than the auction platforms appointed pursuant to Article 26(1) or (2)

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1. Any auction platform appointed pursuant to Article 30(1) shall carry out the same functions as the auction platform appointed pursuant to Article 26(1) as provided for in Article 27.

However, an auction platform appointed pursuant to Article 30(1) shall be exempted from the provisions of Article 27(1)(c) and it shall submit the exit strategy referred to in Article 27(3) to the appointing Member State, who must consult the auction monitor thereon.

▼B

2. Any auction platform appointed pursuant to Article 30(2) shall carry out the same functions as the auction platforms appointed pursuant to Article 26(2) as provided for in Article 28 except for Article 28(1)(c) on the auction calendar which shall not apply.

3. The provisions on the auction calendar provided for in Article 8(1), (2) and (3), Articles 9, 10, 12, 14 and 32 shall apply to the auction platforms appointed pursuant to Article 30(1) or (2).

Article 32

Auction calendar for any auction platform other than the auction platforms appointed pursuant to Article 26(1) or (2)

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1. The volume of allowances covered by Chapter III of Directive 2003/87/EC auctioned in individual auctions conducted by an auction platform appointed pursuant to Article 30(1) or (2) of this Regulation shall be no greater than 20 million allowances and no less than 3,5 million allowances; save where the total volume of allowances, covered by Chapter III of Directive 2003/87/EC, to be auctioned by the appointing Member State is less than 3,5 million in a given calendar year, in which case the allowances shall be auctioned in a single auction per calendar year. However, the volume of allowances covered by Chapter III of Directive 2003/87/EC auctioned in an individual auction conducted by those auction platforms shall be no less than 1,5 million allowances in the respective periods of 12 months when a number of allowances is to be deducted from the volume of allowances to be auctioned pursuant to Article 1(5) of Decision (EU) 2015/1814.

▼B

2. The volume of allowances covered by Chapter II of Directive 2003/87/EC auctioned in individual auctions conducted by an auction platform appointed pursuant to Article 30(1) or (2) of this Regulation shall be no greater than 5 million allowances and no less than 2,5 million allowances; save where the total volume of allowances, covered by Chapter II of Directive 2003/87/EC, to be auctioned by the appointing Member State is less than 2,5 million in a given calendar year, in which case the allowances shall be auctioned in a single auction per calendar year.

3. The total volume of allowances covered by Chapters II and III of Directive 2003/87/EC to be auctioned by all auction platforms appointed pursuant to Article 30(1) or (2) of this Regulation collectively shall be distributed evenly over any given calendar year, except that the volume auctioned in auctions held in August of each year shall be half of the volume auctioned in other months of the year. ►M1 These requirements shall be considered to be met where each auction platform appointed pursuant to Article 30(1) or (2) meets these requirements individually. With respect to the calendar year 2012, the foregoing shall apply as from 1 month after the start of the auctions conducted by any of these auction platforms. ◄

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4. The auction platforms appointed pursuant to Article 30(1) or (2) of this Regulation shall determine and publish the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances to be auctioned in individual auctions each year, covered by Chapter II of Directive 2003/87/EC, by 31 October of the previous year or as soon as practicable thereafter, and for those covered by Chapter III of that Directive, by 15 July of the previous year or as soon as practicable thereafter. The auction platforms concerned shall make their determination and publication only after the determination and publication pursuant to Articles 11(1) and 13(1) of this Regulation by the auction platforms appointed pursuant to Article 26(1) or (2) of this Regulation, unless such an auction platform has not yet been appointed. The auction platforms concerned shall make their determination and publication only after having consulted the Commission and obtained its opinion thereon. The auction platforms concerned shall take the utmost account of the Commission's opinion.

▼B

Published calendars referred to in the first subparagraph shall be consistent with any relevant conditions or obligations listed in Annex III.

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The auction platforms appointed pursuant to Article 30(1) or (2) shall determine and publish as provided for in the first subparagraph of this paragraph in accordance with the volumes attributed to the Member State appointing the auction platform concerned as set out in Annex I and the Commission’s latest determination and publication of the estimated number of allowances to be auctioned referred to in Article 10(1) of Directive 2003/87/EC, taking into account to the extent possible any transitional free allocations deducted or to be deducted from the quantity of allowances that a given Member State would otherwise auction pursuant to Article 10(2) of Directive 2003/87/EC as provided for in Article 10c(2) of that Directive.

▼B

5. Where an auction conducted by an auction platform appointed pursuant to Article 30(1) or (2) is cancelled by the auction platform pursuant to Article 7(5) or (6) or Article 9, the auctioned volume shall be distributed evenly either over the next four auctions scheduled on the same auction platform or, if the auction platform concerned conducts less than four auctions in a given calendar year, over the next two auctions scheduled on the same auction platform.

Article 33

Review of this Regulation

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Upon delivery by the auction monitor of the annual consolidated report concerning the auctions conducted in 2014, the Commission shall review the arrangements provided for in this Regulation including the operation of all auction processes.

▼B

The review shall analyse the experience acquired with regard to the interaction between the auction platforms appointed pursuant to Article 30(1) or (2) and those appointed pursuant to Article 26(1) or (2) as well as the interaction between the auctions and the secondary market.

The review shall be carried out in consultation with Member States and stakeholders.

The Commission may put forward any measures deemed necessary to deal with any distortion or malfunctioning of the internal market or the carbon market arising from the arrangements under this Regulation, having regard to the outcome of the review, with a view to entry into force of such measures by 31 December 2016.







CHAPTER IX

APPOINTMENT REQUIREMENTS APPLICABLE TO THE AUCTIONEER AUCTION MONITOR AND ANY AUCTION PLATFORM

Article 34

Appointment requirements applicable to the auctioneer and the auction monitor

1. When appointing auctioneers and the auction monitor, the Member States shall take into account the extent to which candidates:

(a) exhibit the least risk of conflict of interest or market abuse having regard to the following:

(i) any activities on the secondary market;

(ii) any internal processes and procedures to mitigate the risk of conflict of interest or market abuse;

(b) are able to fulfil the auctioneer’s or the auction monitor’s functions, in a timely manner, in accordance with the highest professional and quality standards.

2. The auctioneer’s appointment shall be subject to the conclusion of the arrangements referred to in Article 22(2) and (3) between the auctioneer and the auction platform concerned.

Article 35

Appointment requirements applicable to any auction platform

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1. Auctions shall only be conducted on an auction platform authorised as a regulated market whose operator organises a secondary market in allowances or allowances derivatives.

▼B

2. Any auction platform appointed under this Regulation for the auctioning of two-day spot or five-days futures shall be allowed, without further legal or administrative requirements by the Member States, to provide appropriate arrangements so as to facilitate access to and participation in auctions by bidders referred to in Article 18(1) and (2).

3. When appointing any auction platform, the Member States shall take into account the extent to which candidates demonstrate fulfilment of all of the following:

(a) ensuring respect of the principle of non-discrimination both de facto and de jure;

(b) full, fair and equitable access to bid in the auctions for SMEs covered by the Union scheme and access to bid in the auctions for small emitters;

(c) ensuring cost-efficiency and avoiding undue administrative burden;

(d) robust auction supervision, notification of suspicions of money laundering, terrorist financing, criminal activity or market abuse, administration of any required remedial measures or sanctions, including the provision of an extra-judicial dispute resolution mechanism;

(e) avoiding distortions of competition in the internal market including the carbon market;

(f) ensuring the proper functioning of the carbon market including the implementation of the auctions;

(g) connecting to one or more clearing system or settlement system;

(h) the provision of adequate measures requiring an auction platform to hand over all tangible and intangible assets necessary for the conduct of the auctions by an auction platform’s successor.

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4. An auction platform may only be appointed pursuant to Article 26(1) or 30(1) where the Member State where the candidate regulated market and its market operator are established has ensured that the national measures transposing Title III of Directive 2004/39/EC apply to the auctioning of two-day spot or five-day futures to the extent relevant.

An auction platform shall only be appointed pursuant to Articles 26(1) and 30(1) after the Member State, where the candidate regulated market and its market operator are established, has ensured that the competent authorities of that Member State are able to authorise and supervise them in accordance with the national measures transposing Title IV of Directive 2004/39/EC to the extent relevant.

▼B

Where the candidate regulated market and its market operator are not established in the same Member State, the first and second subparagraphs shall apply to both the Member State where the candidate regulated market is established and the Member State where its market operator is established.

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5. The competent national authorities of the Member State referred to in the second subparagraph of paragraph 4 of this Article designated under Article 48(1) of Directive 2004/39/EC shall decide on the authorisation of a regulated market appointed, or to be appointed, pursuant to Article 26(1) or 30(1) of this Regulation, provided that the regulated market and its market operator comply with the provisions of Title III of Directive 2004/39/EC, as transposed into the national legal order of the Member State of their establishment pursuant to paragraph 4 of this Article. The decision on authorisation shall be taken in accordance with Title IV of Directive 2004/39/EC as transposed into the national legal order of the Member State of their establishment pursuant to paragraph 4 of this Article.

▼B

6. The competent national authorities referred to in paragraph 5 of this Article shall maintain effective market oversight and take the necessary measures to ensure that the requirements referred to in that paragraph are complied with. To that effect, they shall be able to exercise directly, or with the assistance of other competent national authorities designated pursuant to Article 48(1) of Directive 2004/39/EC, the powers provided for in the national measures transposing Article 50 of that Directive with regard to the regulated market and its market operator referred to in paragraph 4 of this Article.

The Member State of each competent national authority referred in paragraph 5 shall ensure that the national measures transposing Articles 51 and 52 of Directive 2004/39/EC apply in relation to the persons responsible for failure to comply with their obligations under Title III of Directive 2004/39/EC as transposed into the national legal order of the Member State of their establishment pursuant to paragraph 4 of this Article.

For the purposes of this paragraph, national measures transposing Articles 56 to 62 of Directive 2004/39/EC shall apply to cooperation between competent national authorities of different Member States.







CHAPTER X

MARKET ABUSE REGIME APPLICABLE TO AUCTIONED PRODUCTS

Article 36

Market abuse regime applicable to financial instruments within the meaning of Article 1(3) of Directive 2003/6/EC

1. For the purposes of this Regulation, where two-day spot or five-days futures are financial instruments within the meaning of Article 1(3) of Directive 2003/6/EC, that Directive shall apply to the auctioning of those auctioned products. ►M1 The foregoing shall be without prejudice to the application of Articles 38 to 40 of this Regulation to the use of inside information to withdraw a bid. ◄

2. Where two-day spot or five-days futures are not financial instruments within the meaning of Article 1(3) of Directive 2003/6/EC, the provisions of Articles 37 to 43 of this Regulation shall apply.

Article 37

Definitions for market abuse regime applicable to auctioned products other than financial instruments within the meaning of Article 1(3) of Directive 2003/6/EC

For the purposes of Articles 38 to 43 which apply to auctioned products other than financial instruments within the meaning of Article 1(3) of Directive 2003/6/EC, the following definitions shall apply:

(a) ‘inside information’ means information of a precise nature which has not been made public, relating, directly or indirectly, to one or more of the auctioned products, and which, if it were public, would be likely to have a significant effect on the prices at which bids would be made.

For persons charged with the execution of bids, inside information also means information conveyed by a client and related to the client’s pending bids, which is of a precise nature, which related directly or indirectly to one or more auctioned products and which, if it were made public, would be likely to have a significant effect on the prices at which bids would be made;

(b) ‘market manipulation’ means:

(i) bids, or transactions or orders on the secondary market:

— which give, or are likely to give, false or misleading signals as to the demand for or price of the auctioned products, or

— which secure, by a person, or persons acting in collaboration, an auction clearing price for the auctioned products at an abnormal or artificial level,

unless the person who made the bid or, on the secondary market, the transaction or the order, establishes that its reasons for so doing are legitimate;

(ii) bids which employ fictitious devices or any other form of deception or contrivance;

(iii) dissemination of information through the media, including the Internet, or by any other means, which gives, or is likely to give, false or misleading signals as to the auctioned products, including the dissemination of rumours and false or misleading news, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading. In respect of journalists when they act in their professional capacity such dissemination of information is to be assessed, taking into account the rules governing their profession, unless those persons derive, directly or indirectly,