PART 7Appointment Requirements for the Auctioneer and the Auction Platform

Appointment requirements applicable to any auction platformI125

1

Auctions may only be conducted on an auction platform which is—

a

a recognised auction platform;

b

authorised as a recognised investment exchange whose operator organises a secondary market in allowances or allowances derivatives.

2

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.

3

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.

4

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).

5

When appointing the auction platform, the auctioneer must 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 in terms of the policies and rules of the candidates, and in their implementation in practice;

b

ensuring full, fair and equitable access to bid in the auctions for SMEs and access to bid in the auctions for hospitals and small emitters, as defined in article 4 of the Trading Scheme Order;

c

ensuring cost-efficiency and avoiding undue administrative burdens;

d

robust auction supervision, notification of suspicions of money laundering, terrorist financing, other 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, including competition in 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.

6

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 M1, as applicable.

7

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.

8

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 M2