Romanian Commodities Exchange (BRM) announces the launch for the first time in Romania, on November 16, 2020, of derivative contracts having as supporting asset natural gas.
The announced event continues the effort of recent years of the BRM and Romanian producers and suppliers to build together a strong, modern and efficient natural gas market, able to finally offer the country the position and status it deserves in the region, BRM officials write in a press release.
“The current natural gas market is very young, but its development has been impetuous. In just a few years, the Romanian Commodity Exchange (BRM) has managed to make available to participants, together with them, mechanisms, tools and products developed for physical trading, able to provide a high degree of efficiency and synchronization with the operation of similar markets in European Union. Despite the legislative flaws that disrupted the domain and the state monopolistic tendencies of the authorities, in periods when they did not intervene in the market through unjustified taxes, traded volumes were high and prices followed a consumer-friendly dynamic. However, the introduction and operationalization of derivative contracts is proof of maturity and dedication.”
Derivative contracts, which are essentially standardized forward contracts, are highly complex. Their main characteristics refer to fungibility, liquidity, flexibility of entry and exit from positions, maximum degree of security of solvency by involving a central counterparty in post-trading.
”In order to ensure the full operational functionality for medium and long term futures contracts with natural gas assets, the Romanian Commodity Exchange, under the supervision on the wholesale market of the National Energy Regulatory Authority (ANRE), of ACER (Agency for Cooperation of Regulatory Authorities in the field of Energy) through the REMIT reporting system and with the agreement of the Financial Supervisory Authority (ASF), will offer from November 16, 2020, both the functions of electronic trading platform and post-trading, by assuming the quality of financial counterparty in all recorded transactions.”
BRM is of the opinion that the launch of derivative contracts on natural gas will be boost the Romanian entrepreneurial spirit in the stock market, the beginning of a prolific development stage, marked by the hope of collaboration and understanding between market operators and participants with regulators, authorities and legislators in Romania, in favor of the economic environment and successful integration into European markets.