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 I-SEM Registration FAQs 

 
1. What is I-SEM Registration?


2. Who can I contact to find out more information on I-SEM Registration?


3. What is the 'Know Your Customer' or 'KYC' process?


4. Where can I find the KYC Form?


5. What is a Registration Contact, and should I register as one?


6. Where can I find more information on Collateral Calculations for the I-SEM?


7. When is the next Registration Event? And how can I participate?


8. What are the timelines for I-SEM Registration?


9. Where can I find published materials relating to I-SEM Registration?


10. Who can I register with? And how do I get in contact with them?


11. Regarding ECC's requirement of former experience in trading systems, are any specific trader qualifications required to operate in the Day-Ahead and Intra-Day Markets?


12. If registering as a Non-Clearing Member (NCM), what level do we need to register at (i.e. Group level, Party level or Legal Entity)?


13. Can one legal entity register twice if mandated as separate by the regulators?


14. How does the Balancing Market link up with the Day-Ahead and Intra-Day Markets?


15. Is there a formal registration process in place for registering with the clearing banks?


16. What are the VAT amounts based on, in the Balancing Market / Capacity Market?


17. What VAT information is required as part of the Balancing Market / Capacity Market registration?


18. What is a ‘place of establishment’ for VAT purposes?


19. Does a Party need to provide a VAT registration number as part of registration for the Balancing Market / Capacity Market?


20. How is a Trading Site Supply Unit (TSSU) treated in the I-SEM?


21. Can I transfer my existing collateral account and Deed of Charge or Letter of Credit from SEM to ISEM?


22. How will interconnector trading function in I-SEM?


23. How will VAT be invoiced in the I-SEM?


24. What will be the REMIT reporting requirements in the new markets?



1. What is I-SEM Registration?

Registration is the process of ensuring Parties and their Units are enrolled in a timely and correct manner for participation under the new I-SEM arrangements.

A Party will need to register for each market they wish to participate in. For some markets, an existing SEM Party will be required to go through a transitional registration process to ensure they remain active in I-SEM. For other markets new registrations will be required.

For more information, please see the BLG Registration Presentation from Oct 19th
here and the Transitional Registration Plan here.

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2. Who can I contact to find out more information on I-SEM Registration?

For more information on I-SEM Registration, please see the I-SEM Registration Webpage here. If you have further queries or feedback, please contact Claire Breslin at I-SEMRegistration@sem-o.com.

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3. What is the 'Know Your Customer' or 'KYC' process?

The Know Your Customer (KYC) process is completed by ECC for each Participant wishing to join the Day-Ahead/Intra-Day Markets (DAM/IDM). The process asks for information from the participant related to their company. ECC evaluate this information to ensure the legitimacy and adequate financial and legal standing of the company before entry to the DAM/IDM markets is allowed.

Participants are requested to register their interest in becoming a Participant in the DAM/IDM markets with the I-SEM Registration Team via email to
I-SEMRegistration@sem-o.com by the 31st December 2016. This involves contacting the I-SEM Registration Team and confirming that you may wish to have involvement in the DAM/IDM markets. The I-SEM Registration Team and ECC will then follow up with you to discuss any potential setup considerations and questions you may have.

There is no requirement to complete the KYC forms by the 31st December 2016. However, we would recommend that the KYC application form is completed as soon as sufficient details are known of the proposed registration.

Completed KYC forms will need to be provided, at the latest, with the other ECC forms by the deadline of 7th August 2017.

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4. Where can I find the KYC Form?

For Non-Clearing Members, the Know Your Customer (KYC) form can be found here. For more information on the KYC form, please see the ECC Webpage here. If you have further queries with regards to the KYC form, please contact Anke Voigt at anke.voigt@ecc.de.

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5. What is a Registration Contact, and should I register as one?

Participants are asked to nominate a ‘Registration Contact’ for each Party to allow direct communication on registration related topics and the registration process. Please submit details of the Registration Contact details by email to I-SEMregistration@sem-o.com.

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6. Where can I find more information on Collateral Calculations for the I-SEM?

Based on the latest drafting of the Trading and Settlement Code (TSC), the following describes how credit cover will be calculated for each Participant.  The Required Credit Cover (RCC) of a Participant will be determined based on the following components. It will be calculated for both Balancing and Capacity together.

1. Actual Exposure – Consisting of both Settlement Documents that have been issued but not yet paid, as well as settled days that have not yet been included in a Settlement Document.
2. Traded not Delivered – Amounts traded in the DAM/IDM that have not yet been physically delivered (i.e. have not been settled in the Balancing Market).
3. Undefined Exposure – The forecast of the future exposure of the Participant, which has not yet been traded.
4. Fixed Credit Requirement – For resettlement exposures.
5. Settlement Reallocation Agreement (SRAs) Transfers – To allow for SRAs that have been put in place to transfer financial obligations between Participants.

The RCC will be the summation for all units (i.e. Generation, Assetless and Supply) under the same Participant to determine the RCC. Where the exposure of a unit reduces the exposure of the Participant to the market, this will be included as a ‘credit’ in the RCC calculations.

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7. When is the next Registration Event? And how can I participate?

An invitation for upcoming events will be sent out to all participants signed up for I-SEM Alerts. Please see a quick guide here for step-by-step instructions.

Alternatively, for more information on the next I-SEM Registration events, please see the I-SEM events located in our Calendar (
Link Here). Simply click on the event you are looking for or filter by event category. 

Participants are asked to nominate a ‘
Registration Contact’ for each Party to allow direct communication on registration related topics and the registration process. Please submit details of the Registration Contact details by email to I-SEMregistration@sem-o.com.

You can register to attend the event by emailing
I-SEMProject@sem-o.com.

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8. What are the timelines for I-SEM Registration?

The current timelines are detailed in the Transitional Registration Plan (Link Here). Additionally, the High Level Overview and Detailed Diagrams can also be found in the Transitional Registration Plan. Any updates to these documents will be communicated to participants via the Liaison Group events.

If you have any queries regarding I-SEM Registration, please email Claire Breslin at 
I-SEMregistration@sem-o.com.

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9. Where can I find published materials relating to I-SEM Registration?

All documentation relating to I-SEM Registration are located in Publications (Link Here). Simply filter by 'Business Liaison Group' under the Category drop-down list and 'Registration' under Subcategory as per below.


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10. Who can I register with? And how do I get in contact with them?

The organisation a Party must register with is dependent on the market they wish to participate in. The diagram below outlines the contacts with the associated markets:





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11. Regarding ECC's requirement of former experience in trading systems, are any specific trader qualifications required to operate in the Day-Ahead and Intra-Day Markets?

Specific trader requirements are accounted for by the exchange rather than by the clearing house. In this case, SEMO will produce a set of NEMO market rules (currently in development through NEMO BLG meetings) and this will account for any specific requirements. The specific requirements, if relevant, are a local NEMO market rule which is determined by each exchange. In relation to this question, previous experience should be included but there will be no prerequisite linked to this form specifically.

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12. If registering as a Non-Clearing Member (NCM), what level do we need to register at (i.e. Group level, Party level or Legal Entity)?

A Non-Clearing Member (NCM) is always registered as a Legal Entity. This would more than likely relate to a Party under the Balancing Market as a Party must be a legal entity.

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13. Can one legal entity register twice if mandated as separate by the regulators?

One legal company can be setup with two different Member IDs but please note that both IDs are not allowed to trade the same product. Typically the split is made because of using different clearing members for Spot and Derivatives Market or between different exchanges.

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14. How does the Balancing Market link up with the Day-Ahead and Intra-Day Markets?

The setup of the ‘members’ in the Day-Ahead/Intra-Day Markets does not need to match the setup of Parties and Participants in the Balancing Market. It is possible to have a different legal entity trading the units in the Day-Ahead/Intra-Day markets to that setup in the Balancing market once the appropriate agreements are in place. Also, in other energy markets they tend to use portfolios to represent groups of units. For the I-SEM this is not the case as the market design dictated that all trading shall be at a unit level. Therefore, trading for both the Day-Ahead/Intra-Day and Balancing Markets will be done at a unit level. This means, all Day-Ahead/Intra-Day results will be transferred and applied at a unit level for the balancing/imbalance settlement and for credit cover calculations in the balancing market.

Examples of potential setups are provided in the following document
here.

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15. Is there a formal registration process in place for registering with the clearing banks?

There is no process at ECC to register with clearing banks. Please contact a potential clearing bank directly to get all your questions answered. Please find here a list of all clearing members registered at ECC.

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16. What are the VAT amounts based on, in the Balancing Market / Capacity Market?

The I-SEM Balancing Market / Capacity Market Design is based on a wholesale pool concept. In this context SEMO as the Market Operator does not take title to the energy as part of the buying and selling of energy in the Balancing Market / Capacity Market.

As approved by the Revenue Authorities of both the Republic of Ireland (ROI) and United Kingdom (UK) jurisdictions, SEMO calculate VAT amounts for the purposes of Participants completing VAT returns.

These VAT amounts are based on the proportion of energy charges and payments in the Balanicng Market / Capacity Market relative to the place of establishment for VAT purposes of the buyer or seller.

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17. What VAT information is required as part of the Balancing Market / Capacity Market registration?

For determination of the applicable VAT treatment, SEMO need to know who is the party to the transaction and where they are established for VAT purposes. i.e. the legal entity who is buying and the legal entity that is selling in the associated transaction and where these legal entities are established for VAT purposes.

Parties in the I-SEM are required to provide their place of establishment for VAT purposes as part of the registration of the Party and its Participants.

Parties do not have to provide proof of the place of establishment for VAT purposes to SEMO. It is each Party’s responsibility to ensure that the correct place of establishment for VAT purposes is provided so that the corrrect VAT treatment is applied to the transactions. Where a Party has doubt over where it is established for VAT purposes, they should seek professional taxation advice considering the significant VAT consequences that such a position may have.

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18. What is a ‘place of establishment’ for VAT purposes?

This is governed by legislation and case-law of the Court of Justice of the European Union.
Broadly speaking, an establishment for VAT purposes exists in the country where the functions of the business’s central administration are carried out i.e. the place where:

- The essential decisions concerning the general management of the business are taken;
- Its registered office is located; and
- Its management meets.

The above sets out factors which should be considered when determining where a business is established for VAT purposes. However, in instances where one or more of the above factors is not present, a VAT establishment in a jurisdiction may still exist. Each case should be assessed on its own merits.

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19. Does a Party need to provide a VAT registration number as part of registration for the Balancing Market / Capacity Market?

A Party should provide its VAT registration number for the jurisdiction in which it is established for VAT purposes in relation to the supply/purchase of energy in the Balancing Market and Capacity Market.

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20. How is a Trading Site Supply Unit (TSSU) treated in the I-SEM?

In the Balancing Market:

  • Capacity Charges, Imperfections etc are not paid by the TSSU unless the trading site - which contains both the TSSU and GUs-  is a net importer from the grid. If the generators are running and TSSU demand is less than this generation (hence the site is a net exporter), then you should not incur these charges.
  • Market Operator Charges are still relevant if you have a TSSU and are not dependent on the net import or net export from the trading site.

In the Day Ahead and Intraday Markets (DAM/IDM):

There are a few different scenarios for how Trading Sites, TSSUs and Generator Units could interact in the DAM/IDM. Take for example the setup of a GU (100MW) before house load, and TSSU (5MW) under the same trading site.

Scenario 1: Net Export from the Trading Site

  • In this case metering will show a quantity against the GU (95)  and nothing against the TSSU. So to avoid an imbalance you would need to trade the net export of 100-5 = 95MW against the GU in the DAM

Scenario 2: Net Import from the Trading Site (ie. GU off line)

  • In this case the metering would show 5MW demand on the TSSU and nothing on the GU. To avoid an imbalance you would need to trade either

a) 5MW against the TSSU in the DAM, or 
b) 5MW(purchase) against the GU in the DAM.

- For option a) the imbalance on the GU and the imbalance on the TSSU would be zero.
- For option b) there would be an imbalance on the GU  due to the contract in the DAM which would be offset against an imbalance the other way on the TSSU. This would be cost/profit neutral as the imbalance price paid and received would be the same when you consider revenues across both units.

Scenario 3: An associated Supply Unit (ASU) instead of TSSU

  • In this case, scenarios 1 and 2a apply with the ASU substituted for TSSU. i.e. the ASU will need to trade in the DAM when the trading site has net import, but not when the trading site has net export.

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21. Can I transfer my existing collateral account and Deed of Charge or Letter of Credit from SEM to ISEM?

Based on legal review of the trust arrangements for the SEM/I-SEM and potential issues during default and credit call scenarios, the collateral requirements  for Participants under SEM and I-SEM will need to be maintained separately.

This means that separate Letters of Credit and separate collateral reserve accounts will need to be defined for I-SEM. A new deed of charge will also be required as the deed is specific to the collateral account.

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22. How will interconnector trading function in I-SEM?

A Having an Assetless Unit registered in the I-SEM will not allow interconnector trading as currently occurs in the SEM.

Interconnector traders are not a feature of the I-SEM design.

The design of the I-SEM involves the following components related to interconnector trading.

1) Financial Transmission Rights:  Auctions run by the Joint Allocation Office (JAO), on behalf of the Interconnector Owners, to allow FTR holders to receive the congestion rents from the interconnector. This congestion rent will be provided from the revenues received where there is a different in price exists in the Day-Ahead market between the SEM and UK markets due to congestion of the interconnector i.e the interconnector is fully utilised. Participants wishing to be involved in this market must register with JAO to trade in this market.  Please click
here for the JAO registration website or to contact the Interconnector Administrators, please email EastWestInterconnector@Eirgrid.com or info@mutual-energy.com.

2) Day-Ahead and Intraday Trading:  Unlike the existing SEM, under the I-SEM design there are no physical transmission rights (either from explicit auctions prior to the trading day, nor from implicit auctions as part of intraday trading). In the I-SEM participants trade in the SEM, the market coupling between SEM and the rest of Europe determines the amount of generation and consumption scheduled in the SEM and from this the net flow of power over the interconnectors. A single shipper then manages the physical and financial flows on the interconnectors with any revenues earned from the Day Ahead price difference between coupled market going the FTR holders mentioned above. This means the Interconnector Trader is no longer relevant for I-SEM and a Participant will not be able to register as an Interconnector Trader in I-SEM.

The Assetless Unit is a virtual unit in the I-SEM. They allow trading in the Day-Ahead and Intraday markets by Participants that do not have physical generation units nor have a supply unit with customer demand, but may wish to trade between the different I-SEM market timeframes, helping with liquidity and price formation. Assetless Units are required to register a unit in the Balancing Market to enable settlement of any imbalances should they not fully close out their positions in the ex-ante markets.

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23. How will VAT be invoiced in the I-SEM?

For balancing and capacity, settlement will be performed at a Participant level, not Party (PY) level as it must be jurisdictional, and not Account (old PT) as this concept is no longer used as sales/purchases can appear on the same settlement document.

  • Settlement for balancing and capacity is now more about sales/purchases rather than supplier/generator.
  • Settlement calculations sales/purchases will be performed at a Unit level.
  • VAT amounts are intended to be calculated at a Participant level for each billing run [e.g. initial, M+4, M+13 etc] and will be calculated and shown separately for sales and purchases in the Invoice.
  • As the balancing market will not be trading the full generation or demand volumes, but only the balancing/imbalance volumes, the determination of the VAT proportions for local, rest of EU and non-EU is to be based on the sales/purchase amounts rather than net demand/generation [subject to confirmation by HMRC and Revenue].

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24. What will be the REMIT reporting requirements in the new markets?

Details on REMIT reporting for CAP, BAL and DAM/IDM to be confirmed in late 2017, at which time REMIT reporting agreements will be issued for signing by participants if they want SEMO to report on their behalf


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SEMO is a joint venture between EirGrid PLC and SONI Limited