The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021

These Regulations may be cited as the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021.

They come into force on the day after the day on which these Regulations are made.

In these Regulations—

• “affiliated undertaking” means any undertaking within a group;

• “allowance” means, except where the context requires otherwise, an allowance created under the Trading Scheme Order M2 to emit 1 tonne of carbon dioxide equivalent;

• “appointed auction platform” means the auction platform appointed by the F1auctioneer under regulation 22(1);

• “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 recognised auction platform;

• “auctioned product” has the meaning given in regulation 4(1);

• “auction reserve price” has the meaning given in regulation 6(9);

• “auctioneer” means any public or private entity appointed by the Treasury, to auction allowances;

• “beneficial owner” has the meaning given in regulation 3(1) of the Money Laundering Regulations;

• “bid” means an offer in an auction to acquire a given volume of allowances at a specified price;

• “bidding window” means the time period during which bids may be submitted;

• “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 regulation 31;

• “clearing system” means any 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;

• “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, that may be carried out by a clearing or settlement system;

• “collateral” means the forms of collateral security referred to in regulation 2(1) of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 M3, including any allowances accepted as security by the clearing system or settlement system;

• “credit institution” means an undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account;

• “criminal activity” means any kind of criminal involvement in the commission of any of the offences referred to in—

  1. a

     Schedule 3 to the Anti-Terrorism, Crime and Security Act 2001 M4,

  2. b

     Schedule 3 to the Money Laundering Regulations,

  3. c

     Regulations made under section 1 of the Sanctions and Anti-Money Laundering Act 2018 M5, or

  4. d

     Part 3 of the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019 M6;

• “customer due diligence measures” has the meaning given in regulation 3(1) of the Money Laundering Regulations;

• “FCA” means the Financial Conduct Authority M7;

• “five-day futures” means allowances auctioned for delivery at an agreed date no later than the fifth trading day from the day of the auction;

• “group”, in relation to undertakings, means a parent undertaking and all its subsidiary undertakings;

• “investment firm” has meaning given in as in Article 2(1A) of the Markets in Financial Instruments Regulation;

• “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;

• “market abuse” means behaviour prohibited by Articles 14 and 15 of the Market Abuse Regulation;

• “Market Abuse Regulation” means Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16th April 2014 on market abuse (Market Abuse Regulation);

• “Markets in Financial Instruments Regulation” means Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15th May 2014 on markets in financial instruments;

• “money laundering” has the meaning given by section 340(11) of the Proceeds of Crime Act 2002 M8;

• “Money Laundering Regulations” means the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 M9;

• “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 these Regulations;

• “nominated holding account” means one or more holding accounts, of whatever type, provided F2for in paragraphs 10 to 14 of Schedule 5A to the Trading Scheme Order F3designated for the purposes of participating in or conducting the auction process including the holding of allowances in escrow, pending their delivery under these Regulations;

• “parent undertaking” and “subsidiary undertaking” have the same meanings as in the Companies Act 2006 M10 (see section 1162 of, and Schedule 7 to, the Companies Act 2006);

• “recognised auction platform” has the meaning given in regulation 22;

• “recognised investment exchange” means an investment exchange in relation to which a recognition order is in force under section 290 of the Financial Services and Markets Act 2000 M11, but does not include an overseas investment exchange (within the meaning of section 313 of that Act);

• “the registry” means the electronic system established by the UK ETS authority under paragraph 5 of Schedule 5A to the Trading Scheme Order;

• F5...

• “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;

• “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;

• “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—

  1. a

     the banking system and the registry;

  2. 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;

• “settlement” means—

  1. a

     payment by a successful bidder, its successor in title, a central counterparty or a settlement agent of the sum due for allowances to be delivered to that bidder, its successor in title, the central counterparty, or a settlement agent, and

  2. b

     delivery of the allowances to the successful bidder, its successor in title, the central counterparty or a settlement agent;

• “terrorist financing” has the meaning given in regulation 3(1) of the Money Laundering Regulations;

• “trading day” means any day during which an auction platform and the clearing system or settlement system connected to it are open for trading;

• “Trading Scheme Order” means the Greenhouse Gas Emissions Trading Scheme Order 2020;

• “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.

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Terms used in these Regulations and in the Trading Scheme Order, and not defined in these Regulations, have the same meaning as in that Order.

Any reference in these Regulations to an EU regulation, as defined by section 20 of the European Union (Withdrawal) Act 2018 M12, is, unless otherwise provided, a reference to that regulation as it forms part of domestic law under that Act.

A reference in these Regulations to the “UK ETS authority” is a reference to all of the national authorities.

Allowances may be offered for sale on an appointed auction platform by means of standardised electronic contracts, and for the purposes of these Regulations, “the auctioned product” means the standardised electronic contract for one or more allowances.

Allowances sold on an auction platform may take the form of either two-day spot or five-day futures.

Bidders at an auction of allowances must submit their bids during one bidding window without seeing bids submitted by other bidders.

Each successful bidder must pay the same auction clearing price referred to in regulation 7 for each allowance regardless of the bid price.

The minimum volume bid is one lot, and each lot auctioned must consist of 500 allowances.

Subject to paragraph (4), each bid may only be submitted, modified or withdrawn during the bidding window set by the auction platform.

Bids submitted may be modified or withdrawn by a deadline before the close of the bidding window set by the appointed auction platform and published on that auction platform's website at least five trading days before the day on which the bidding window opens.

Only a natural person F26... appointed pursuant to regulation 17(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 is binding, unless it is withdrawn or modified pursuant to paragraph (3) or (4), or withdrawn pursuant to paragraph (7).

Where the appointed 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.

The reception, transmission and submission of a bid by an investment firm or credit institution on any auction platform is to be treated as an investment service within the meaning of Article 2(1)(2) of the Markets in Financial Instruments Regulation.

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

An auction platform must sort bids submitted to it in the order of the price bid.

Where the price of several bids is the same, these bids must be sorted through a random selection according to an algorithm determined by the auction platform before the auction.

No bid below the auction reserve price is to be accepted.

The volumes bid must be added up, starting with the highest bid price, and ignoring any bid below the auction reserve price.

All bids making up the sum of the volumes bid determined pursuant to paragraph (5) must be allocated at the auction clearing price determined in accordance with regulation 7.

Where the total volume of successful bids determined pursuant to paragraph (5) exceeds the volume of auctioned allowances, the remaining volume of the auctioned allowances must be allocated to the bidder that has submitted the last bid making up the sum of the volumes bid.

For the purposes of these Regulations, the auction reserve price is to be £22 per tonne of carbon dioxide equivalent covered by the auctioned allowances, or such other sum as may be specified by the Treasury by direction.

The Treasury must publish any direction given under paragraph (9) in such manner as they think fit.

This regulation is subject to regulation 7(1A).

This paragraph applies where the auction clearing price determined in accordance with paragraph (1)(a) F8or (b) would be significantly below the price on the secondary market prevailing during and immediately before the bidding window, taking into account the short term volatility of the price of allowances over a defined period preceding the auction, F9as determined in accordance with the methodology decided on under paragraph (4).

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Before F49the opening of the bidding window of an auction, the appointed auction platform must decide on the methodology to determine F11for the purposes of paragraph (2) the prevailing secondary market price and whether a given price is significantly below the prevailing secondary market price, (“the paragraph (2) methodology”), after consulting the auctioneer, and notifying the FCA.

In between two bidding windows, the appointed auction platform may modify the paragraph (2) methodology, after consulting the auctioneer, and notifying the FCA.

If the appointed auction platform modifies the paragraph (2) methodology it must notify the FCA and the auctioneer without delay.

The auctioneer must determine the auction calendar, including 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 calendar year, and provide the auction calendar to the appointed auction platform.

The appointed auction platform must publish the auction calendar for a year by 15 July of the preceding year or as soon as practicable after that date.

Where AFA as determined during the calendar year under paragraph (1)(b)(i) (“AFA1”) is greater that the notional number of allowances determined under paragraph (1)(b)(ii) (“AFA2”), a number of allowances equal to AFA1 minus AFA2 is to be removed from the total number of allowances to be auctioned in that calendar year, and the auctioneer must adjust the number of allowances to be auctioned at the auctions to be held during the year after AFA1 has been established as the auctioneer considers appropriate.

When AFA1 is less than AFA2, a number of allowances equal to AFA2 minus AFA1 is to be added to the total number of allowances to be auctioned in that calendar year, divided between the auctions which are to be held during that year after AFA1 has been established as the auctioneer considers appropriate.

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Any volume of allowances that may not be auctioned in a given calendar year due to the rounding required by regulation 5(1) must be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

Where the volume of allowances to be auctioned in a calendar year is increased under paragraph (3), the UK ETS authority may F27... create additional allowances for auction in that year.

For the purposes of paragraph (1)(b)(ii), the notional number of allowances to be allocated as part of the aviation free allocation in the scheme year is set out in the following table.

Where the manner in which a modification is to be implemented is not provided for in these Regulations, the auction platform concerned may not implement that modification until it has consulted the FCA and auctioneer.

Where appropriate, the appointed auction platform may F57cancel, or change the date or time of the opening or close of the bidding window of, an auction where the proper conduct of that auction is disrupted or is likely to be disrupted.

In paragraph (1A), a reference to the final annual number of allowances approved under Article 16b of the Free Allocation Regulation to be allocated in respect of all installations includes the number that would have been so approved but for any error in an application for free allocation made under that Regulation or of the regulator or the UK ETS authority in the exercise of functions under that Regulation in consequence of which the UK ETS authority approves, under article 34H(6) of the Trading Scheme Order, an increase to the final annual number of allowances originally approved under Article 16b.

Where the Treasury authorises increasing the volume of allowances to be auctioned in a calendar year under paragraph (1)(b), the UK ETS authority may create additional allowances for auction in that year.

In this regulation—

• “end of day settlement price”, in relation to the relevant December futures contract, means the end of day settlement price per tonne of carbon dioxide equivalent published by the carbon market exchange on which the relevant December futures contract is traded expressed in pounds sterling or, where expressed in Euros, converted to pounds sterling by reference to the Bank of England daily spot exchange rate for that day;

• “F35EU allowance” means an allowance to emit 1 tonne of carbon dioxide equivalent during a specified period that is valid for the purposes of meeting the requirements of Directive 2003/87/EC of the European Parliament and of the Council of 13th October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and is transferable in accordance with the provisions of that directive;

• “relevant carbon market exchange”—

  1. a

     in relation to the trading of the relevant December futures contract on a day in 2019, 2020 or 2021 means the carbon market exchange operated by ICE Futures Europe (company no. 01528617);

  2. b

     in relation to the trading of the relevant December futures contract on a day in any subsequent year (the “relevant year”), the largest carbon market exchange as determined by volume of sales of relevant December futures contract during the calendar year preceding the relevant year;

• “relevant day” means a day for which an end of day settlement price is published;

• “relevant December futures contract”, in relation to a day in the month referred to in paragraph (4)(a) or the 24-month period referred to in paragraph (4)(b), means—

  1. a

     if the day falls in January to November of 2019 or 2020, a futures contract for EU allowances deliverable in December of the year in which the day falls;

  2. b

     if the day falls in December of 2019 or 2020, a futures contract for EU allowances deliverable in December of the year after the year in which the day falls;

  3. c

     if the day falls in January to November of 2021 or a subsequent year, a futures contract for allowances deliverable in December of the year in which the day falls;

  4. d

     if the day falls in December of 2021 or a subsequent year, a futures contract for allowances deliverable in December of the year after the year in which the day falls.

An appointed auction platform must provide the means to access its auctions on a non-discriminatory basis.

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

The appointed auction platform must ensure that its auctions can be accessed remotely by means of an electronic interface accessible securely and reliably through the internet.

In addition, the appointed auction platform may offer bidders the option of accessing its auctions through dedicated connections to the electronic interface.

The appointed auction platform may offer, and the Treasury may by direction require the 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.

The appointed auction platform must 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 must also make available a helpline service accessible by telephone, internet and electronic mail at least during the working hours of each trading day.

Without prejudice to the exemption in paragraph 1(k) of Schedule 3 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 M16, persons covered by that exemption who comply with rules set out in regulation 42 are 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 F18the registered office, or if it has no registered office, the head office, of the person covered by that exemption is situated in the United Kingdom.

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

The option made available pursuant to regulations 27 to 32 for the appointed 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 may not undermine the application of this regulation, or regulations 17 to 19.

The appointed auction platform may rely on reliable checks carried out by the persons referred to in the opening words of paragraph (3), their clients, or the clients of their clients as provided for in regulation 16(3) and (4).

Persons referred to in paragraph (3) are responsible for ensuring that they are able to demonstrate to the appointed auction platform whenever requested to do so by the auction platform pursuant to regulation 18(7)(d) that the conditions in sub-paragraphs (a) and (b) of paragraph (3) are fulfilled.

Subject to paragraph (2), persons eligible under regulation 16(1) or (2) must apply to the auction platform for admission to bid before submitting their first bid directly through the appointed auction platform.

Members of or participants in the secondary market organised by the appointed auction platform fulfilling the requirements of regulation 17(1) must be admitted to bid without applying under paragraph (1).

An application for admission to bid made under paragraph (1) is made by submitting a completed application form to the auction platform.

The application form must be provided by the appointed auction platform, and made available through the internet.

An application for admission to bid, including any supporting documents, must on request be made available for inspection by any law enforcement authorities conducting an investigation referred to in regulation 45(3)(e).

The appointed auction platform must 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 (7) and that any client of the applicant's clients as provided for in regulation 16(4) does the same.

An application for admission is deemed to be withdrawn if the applicant fails to submit information requested by the auction platform within a reasonable period specified in a request for information made pursuant to sub-paragraph (a), (d) or (e) of paragraph (7), by the appointed auction platform, which must 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 sub-paragraph (b) or (c) of paragraph (7).

The appointed auction platform must decide on an application submitted to it and notify its decision to the applicant in writing.

For the purposes of this regulation, “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 law of any part of the United Kingdom to attest officially as to whether a copy is in fact a true copy of its original.

The appointed auction platform must 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, or other criminal activity or market abuse in relation to an applicant, unless such refusal, revocation or suspension is likely to frustrate efforts by law enforcement authorities (within the meaning of regulation 44(10) of the Money Laundering Regulations), or the FCA, to pursue or apprehend the perpetrators of such activities.

In such a case, the appointed auction platform must report to a person nominated for this purpose by the Director General of the National Crime Agency M17 in accordance with regulation 38(4), and to the FCA in accordance with regulation 39(1).

Persons referred to in paragraph (4) must be notified of the refusal to grant admission, or the proposal to revoke or suspend admission, and be given a reasonable period, specified in that notification, to respond in writing.

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

The notification of refusal to grant admission, revocation or of suspension of admission, referred to in paragraphs (1), (2) and (4), must specify any measures needed to comply with paragraph (8) and the auction platform must verify compliance with such measures.

The appointment may be made subject to such conditions (including as to fees charged) and limitations as the Treasury see fit.

The auctioneer must be appointed under paragraph (1) in good time before the commencement of the auctions so as to make any arrangements necessary with the auction platform appointed (or to be appointed) under regulation 22(1), and to implement those arrangements, including any clearing system and settlement system connected to it.

No allowances may be auctioned unless a duly appointed auctioneer is in place and the arrangements referred to in paragraph (3) have been made and are in force.

The auctioneer must ensure that these auction proceeds are paid to the Treasury or into the Consolidated Fund in accordance with paragraph (3), at the latest 15 days following the end of the month within which the auction proceeds were generated.

All sums received by the Treasury under paragraph (3)(b) are to be paid into the Consolidated Fund.

Before the auctioneer makes payment under paragraph (3), the auctioneer may deduct any additional fees for their holding and disbursement, subject to the prior notification of the amount and the reason for these fees by the auctioneer to the F58Treasury.

The auctioneer may appoint a recognised auction platform to auction allowances as provided for in these Regulations.

The term of an auction platform appointed under paragraph (1) may be no longer than 3 years, renewable for no more than a further 2 years.

Paragraph (2) does not apply if the recognised auction platform appointed under regulation 4 of the Community Emissions Trading Scheme (Allocation of Allowances for Payment) Regulations 2012 M18 is appointed as the auction platform under this regulation.

For the purposes of these Regulations, “recognised auction platform” means a recognised investment exchange, in relation to which a recognition order under the Recognised Auction Platforms Regulations 2011 M19 is in force.

At least 20 trading days prior to the opening of the first bidding window, the auction platform must be connected to at least one clearing system or settlement system.

Within three months from the date of its appointment, the auction platform must submit its detailed exit strategy to the F59auctioneer and the Treasury.

The auctioneer's appointment is subject to the conclusion of the arrangements referred to in regulation 20(3) between the auctioneer and the appointed auction platform.

Without prejudice to paragraph (1)(b), a recognised investment exchange whose operator organises a wholesale energy market as defined in Article 2(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency, but does not organise a secondary market in allowances or allowances derivatives, may participate in the procurement procedure pursuant to regulation 22.

Where such a recognised investment exchange is appointed as the appointed auction platform pursuant to regulation 22 and its operator does not organise a secondary market in allowances or allowances derivatives by the time of publication of the procurement procedure pursuant to regulation 22(2), that operator must acquire an authorisation and must organise a secondary market in allowances or allowances derivatives at least 60 trading days prior to the opening of the first bidding window run by the auction platform concerned.

The appointed auction platform may provide appropriate arrangements so as to facilitate access to and participation in auctions by bidders referred to in regulation 16(1) and (2).

The FCA must decide on the authorisation of a recognised investment exchange appointed, or to be appointed, pursuant to regulation 22(1), provided that the recognised investment exchange and its market operator comply with the provisions of Part 18 of the Financial Services and Markets Act 2000, and the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 M20, as applicable.

The FCA must maintain effective market oversight and take the necessary measures to ensure that the requirements referred to in paragraph (6) are complied with.

For the purposes of this regulation—

• “market operator” has the meaning given in Article 2(1)(10) of the Markets in Financial Instruments Regulation;

• “SMEs” means operators or aircraft operators (within the meaning of articles 5 and 6 respectively of the Trading Scheme Order) that are small and medium-sized enterprises within the meaning of Commission Recommendation 2003/361/EC M21

The appointed auction platform must report to the FCA the complete and accurate details of every transaction executed on the auction platform that results in the transfer of allowances to the successful bidders.

The reports on the transactions pursuant to paragraph (1) must be submitted as quickly as possible, and no later than the close of the trading day following the transaction concerned.

Where the successful bidder is a legal person, the appointed auction platform must, in reporting the designation to identify the successful bidder as required under paragraph 6 of this regulation, use a legal entity identifier referred to in Article 5 of Commission delegated regulation (EU) 2017/590 of 28 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the reporting of transactions to competent authorities (“Commission Delegated Regulation (EU) 2017/590”).

The appointed auction platform must be responsible for the completeness, accuracy and timely submission of the reports, and insofar as there are details to transactions which are not available to the auction platforms, the bidders and the auctioneers must submit such information to the auction platform.

Where there are errors or omissions in the transaction reports, the appointed auction platform must correct the information and submit a corrected report to the FCA.

The report pursuant to paragraph (1) must, in particular, include the name of the allowances or allowances derivatives, the quantity bought, the dates and times of execution, the transaction prices, a designation to identify the successful bidders, and if applicable, the clients on whose behalf the transaction was executed.

The report must be drawn up using data standards and formats established in the Commission Delegated Regulation (EU) 2017/590 and include all the relevant details referred to in Annex I to that Regulation.

Each successful bidder or its successor in title, including any intermediaries acting on their behalf, must pay the sum due notified to it pursuant to regulation 44(5)(c) for the allowances won as notified to it pursuant to regulation 44(5)(a), by transferring or arranging for the transfer of the sum due through the clearing system or settlement system, into the auctioneer's nominated bank account in cleared funds either before or at the latest upon delivery of the allowances into the bidder's nominated holding account or the nominated holding account of its successor in title.

An auction platform including the clearing system or settlement system connected to it must transfer the payments made by the bidders or any successors in title arising from the auctioning of allowances to the auctioneers that auctioned the allowances in question.

Payments to the auctioneers are to be made in pounds sterling, regardless of the currency in which the bidder made payment to the auction platform.

A successful bidder, or its successor in title, will only be entitled to delivery of the allowances notified to the successful bidder pursuant to regulation 44(1)(a), if the entire sum due notified to it pursuant to regulation 44(5)(c), is paid to the auctioneer pursuant to regulation 27(1).

A successful bidder, or its successor in title, that fails to meet its obligations under paragraph (1) in full by the due date notified to the successful bidder pursuant to regulation 44(5)(d) is in default of payment.

A bidder in default of payment may be charged interest for each day beginning with the date on which payment was due pursuant to regulation 44(5)(d) and ending on the date on which payment is made at an interest rate set out in the contract appointing the auction platform concerned, calculated on a daily basis.

Where a successful bidder is in default of payment, and settlement has not been effected in accordance with paragraph (4), the allowances must be auctioned at the next two auctions scheduled on the auction platform concerned.

The clearing system or settlement system must allocate each allowance auctioned to a successful bidder or its successor in title, until the total volume allocated matches the volume of allowances notified to the bidder pursuant to regulation 44(5)(a).

Upon payment of the sum due, pursuant to regulation 27(1), each successful bidder or its successor in title must be delivered the allowances allocated to that bidder, as soon as practicable and in any event no later than the deadline for their delivery by transferring the allowances notified to the bidder pursuant to regulation 44(5)(a) from a nominated holding account held in escrow by the clearing system or settlement system acting as custodian, in whole or in part into one or more nominated holding accounts held by the successful bidder or by its successor in title, or into a nominated holding account held in escrow by a clearing system or settlement system acting as custodian for the successful bidder or its successor in title.

Where the clearing system or settlement system fails to deliver the whole or part of the auctioned allowances due to circumstances outside its control, the clearing system or settlement system must deliver the allowances at the earliest opportunity and the successful bidders must accept delivery at that later date.

The remedy provided for in paragraph (1) is the sole remedy to which a successful bidder or its successor in title is entitled to in case of any failure to deliver auctioned allowances, due to circumstances outside the control of the clearing system or settlement system concerned.

Prior to the opening of the bidding window for the auctioning of two-day spot or five-day futures, bidders or any intermediaries acting on their behalf, are required to give collateral.

If so requested, any unused collateral posted by an unsuccessful bidder, together with any interest accrued on cash collateral, is to be released, as soon as practicable after the close of the bidding window.

If so requested, any collateral posted by a successful bidder that has not been used for settlement, together with any interest accrued on cash collateral, must be released, as soon as practicable after settlement.

Prior to the opening of the bidding window for the auctioning of two-day spot or five-day futures, the auctioneer may only be required to give allowances as collateral to be held in escrow by the clearing system or settlement system acting as custodian, pending their delivery.

Where any allowances given as collateral under paragraph (1) are not used, the clearing system or settlement system may retain them in a nominated holding account held in escrow by the clearing system or settlement system acting as custodian, pending their delivery.

The structure and level of fees as well as any related conditions applied by any auction platform and the clearing system and settlement system are to be no less favourable than comparable standard fees and conditions applied on the secondary market.

The auction platform and the clearing system and settlement system may only apply fees, deductions or conditions explicitly set out in the contract appointing them.

Without prejudice to paragraph (2), the costs of the services provided for in regulation 23(1) must be paid for through fees paid by the bidders.

The costs referred to in paragraph (1) must be deducted from the auction proceeds payable to the auctioneers pursuant to regulation 27(2) and (3).

In addition, by 31 January of each year, the auction platform must also provide a summary and an analysis of these monthly reports of the previous year.

The appointed auction platform must provide the reports under paragraph (1) and (2) to the FCA F40, the auctioneer and the Treasury.

The F42FCA and appointed auction platform must actively cooperate F43with the auctioneer and the Treasury and, upon request, F44provide the auctioneer or the Treasury with any information in their possession relating to the auctions, as is reasonably required for the monitoring of the auctions.

Where scrutinising bids in accordance with paragraph (1)(a), the appointed auction platform must pay particular attention to any activity which it regards as particularly likely, by its nature, to be related to money laundering, terrorist financing or other criminal activity.

The appointed auction platform must keep the records referred to in paragraph (4) for as long as a bidder is admitted to bid in its auctions and for at least 5 years following the termination of the relationship with that bidder.

The FCA must monitor and take the necessary measures to ensure compliance of an appointed auction platform with the customer due diligence measures referred to in regulation 17(2)(e), with the obligation to refuse to grant admission to bid, revoke or suspend any admission to bid already granted pursuant to regulation 19(1) and (2), with the monitoring and record keeping requirements of regulation 37 and with the notification requirements of paragraphs (4), (5) and (6).

The appointed auction platform may be held liable for infringements of regulations 18(8) and (12), 19(1) and (2), 37, and paragraphs (4), (5) and (6) of this regulation, and infringements of these provisions are to be treated as breach of a relevant requirement for the purposes of Part 9 of the Money Laundering Regulations.

All suspicious transactions, including attempted transactions, must be reported by the appointed auction platform to the NCA.

The appointed auction platform must inform the NCA of the individual who is responsible for forwarding information pursuant to this regulation.

The report given under paragraph (1) must state what remedial action it F53... proposes to take to counter the wrongdoing referred to in paragraph (1).

Where the appointed auction platform gives a report under paragraph (1) to the FCA, the appointed auction platform must inform the auctioneer and the Treasury of that fact and the remedial action proposed as soon as reasonably practicable.

A maximum bid-size, or any other remedial measures necessary to mitigate an actual or potential discernible risk of market abuse, money laundering, terrorist financing or other criminal activity, as well as anti-competitive behaviour, may be imposed by the appointed auction platform after consulting the FCA F55and the auctioneer.

The maximum bid-size must either be expressed as a percentage of the total number of auctioned allowances in any given auction or a percentage of the total number of auctioned allowances in any given year, whichever may be most appropriate to deal with the risk of market abuse.

This regulation applies to persons authorised to bid pursuant to regulation 16(2).

The amount of the deposit referred to in paragraph (2)(e) must be calculated on a just and reasonable basis.

The method of calculating the deposit referred to in paragraph (2)(e) must be set out in the agreements entered into pursuant to paragraph (2)(d).

Any part of the deposit referred to in paragraph (2)(e) not used to satisfy payment for allowances must be refunded to the payee within a reasonable period after the auction as stated in the agreements entered into pursuant to paragraph (2)(d).

The FCA is responsible for authorising such persons to carry out the activities referred to in paragraph (1) and for monitoring and enforcing compliance with the conduct rules provided for in paragraphs (2) to (6) including the handling of any complaints made for non-compliance with such conduct rules.

The FCA must monitor and enforce the conditions listed in paragraph (8).

Clients of bidders referred to in paragraph (1) may direct any complaints that they may have with regard to compliance with the conduct rules provided for in paragraphs (2) to (6) to the FCA.

Persons referred to in paragraph (1) that are admitted to bid at an auction platform pursuant to regulations 16, 17 and 18 may provide bidding services to clients referred to in regulation 17(3)(a).

Information which is no longer relevant must be archived, and the archives must be accessible through the same auctioning website.

A list of the names, addresses, telephone numbers, electronic mail addresses and websites of all persons admitted to bid on behalf of others in auctions conducted by any appointed auction platform must be published on the website maintained by the auction platform concerned.

The auction platform must announce the results of each auction as soon as is reasonably practicable.

The information on the auction results pursuant to paragraph (1)(a) and (b) must be announced no later than 5 minutes after the close of the bidding window.

The information on the auction results pursuant to paragraph (1)(c) to (f) must be announced no later than 15 minutes after the close of the bidding window.

An auction platform must notify the relevant clearing system and settlement system connected to it of the information notified to each successful bidder under paragraph (5).

Confidential information may not be disclosed by any person who obtained that information, whether directly or indirectly, otherwise than in accordance with paragraph (3).

The measures required to ensure that confidential information is not wrongfully disclosed and the consequences of any such wrongful disclosure by an auction platform, including any persons contracted to work for it, must be set out in the contract appointing it.

Confidential information obtained by an auction platform, including any persons contracted to work for it, may be used solely for the purpose of the performance of its obligations or the exercise of its functions with respect to the auctions.

Confidential information exchanged under paragraph (6) may not be disclosed to any person other than those referred to in paragraph (6)F48... contrary to paragraph (2).

Any person who works, or has worked for, an auction platform involved in the auctions, must be bound by the obligation of professional secrecy and must ensure that confidential information is protected pursuant to this regulation.

Written information provided by the appointed auction platform pursuant to regulation 43 or under the contract appointing it, must be in English.

All other oral or written communication by the appointed auction platform to applicants for admission to bid, persons admitted to bid or bidders participating in an auction, must be made in English.

The appointed auction platform must have effective arrangements to deal with complaints from applicants for admission to bid, bidders admitted to bid, or whose admission to bid has been refused, revoked or suspended.

Those arrangements must include procedures for the fair, independent and impartial resolution of appeals against decisions of the auction platform.

A decision in relation to an appeal under paragraph (2) must be given in writing, with full reasons.

Any errors in any payment or allowance transfers made and collateral or deposit given or released under these Regulations must be notified to the clearing system or settlement system as soon as it comes to the notice of any person.

The clearing system or settlement system must take whatever measures are necessary to rectify any errors in any payment or allowance transfers made and collateral or deposit given or released under these Regulations which come to their attention by whatever means.