Energy exchanges look like other exchanges on the trading screen. Behind it they are different, because what is traded eventually has to be delivered through a physical power grid. The post-trade system is where the financial market and the physical one meet.
Defining the market
Before anything can be traded, the market has to know who its participants are. An energy exchange post-trade system defines the basic information of the market: producers, consumers and the brokers permitted to act for them. RegEx, the OTS energy exchange post-trade system, handles this registration and maintains the assets of every market member.
Listing what can be sold
Producers can only sell what they have and are licensed to sell. RegEx lists commodities, producers’ assets and the licences required for the sale mechanism in the exchange’s trade engine, so trading starts from verified information.
Three systems, one flow
An energy exchange depends on three systems agreeing with each other. RegEx exchanges data with:
- The exchange trade engine, through a text-standard data exchange protocol.
- OCC clearing and settlement, so financial obligations are settled correctly.
- The national grid operator, covering delivery asset files, finalized transactions, fund status and fund transaction history.
When these exchanges are automated, the exchange, the clearing system and the grid operator work from the same picture. When they are manual, each disagreement has to be found and fixed by people.
Different kinds of participants
Energy markets include participants of very different sizes. RegEx supports retailers and large consumers, as well as the physical electricity market.
Several institutions, one system
The post-trade system in an energy market serves more than the exchange. RegEx serves four client groups: the exchange technology operator, the central securities depository, the national grid operator and a systems integration partner.
The post-trade system is where the financial market and the physical one meet.
For an energy exchange, the value of the post-trade system is measured in how rarely trading, clearing and delivery disagree. That is what it should be designed for.