To be able to make purchases, agents in the production market must provide collateral that will enable them to meet any liabilities taken on in relation to their purchases on the production market.
Failure to provide collateral will prevent an agent from acting as a buyer on the production market, such that their bids will be rejected.
In order be able to operate on the intraday continuous market, agents will use the same collateral they have formalized to operate in the day-ahead and intraday auction market. It will only be necessary for them to indicate in advance what volume of that collateral they wish to allocate to the intraday continuous market. This amount will automatically be taken from the surplus collateral available for the day-ahead market and for intraday bids and will be allocated exclusively to the intraday continuous market.
Agents may provide OMIE with the following types of payment collateral:
- Cash deposits to the market operator's bank account as explained in the Market Operator's Information System in the "Settlements" section (the same for payments).
- Bank guarantees
- Line of credit
- Surety Bonds
Additionally, their accredited collection rights, as long as they have not yet been collected, shall also serve to guarantee their purchases or those of a third party.
The market operator published the 2/2021 Instruction on 19 October, "Formalizing guarantees in OMIE." This replaces the previous 3/2020 Instruction published on 12 November 2020. With these instructions, OMIE intends to promote the use of electronic securities instead of physical ones. OMIE has established that the electronic format will be the only accepted means of formalization.
Formalization in XML format will be the preferred method as it enables more efficient management of the security.
This instruction is available at the following link: Instruction 2/2021.
Extensive information on securities in XML format is also available at:
The unit holder, if joining the market on their own behalf.
In case of representation, it will depend on whether it is:
- Representation in their own name and on behalf of third parties:
- The representative agent must provide collateral.
- Representation in the name of and on behalf of third parties:
- The represented party must provide collateral.
Agents have a simulator that provides them with an estimate of the payment collateral to provide to the market operator, depending on predicted transactions on the electricity market and the price estimate based on historical prices.
The payment collateral simulator can be found through the 'Market performance' menu in the section on 'Payment guarantees simulator'
There is no minimum collateral required. The agent may provide collateral they consider appropriate, or no collateral.
However, when verifying the market purchase bid at a positive price or the market sell bid at a negative price, collateral will be checked to ensure you have a sufficient amount. Otherwise, the offer will be rejected.
The market operator will reject collateral or increases to collateral less than €1,000.
The Market Operator's Information System provides updated information on collateral coverage for the next session as well as estimates for the following days.
More information is available in the documentation on the Market Operator's Information System.
An agent's collateral balance to cover the value of new purchase offers on the daily and intraday market will, at any given time, be the sum of:
- The financial collateral provided
- Minus the value of debtor bids accepted in matching, while not final. Once matching is final, these bids will be substituted for payment obligations from point 3 for that session.
- Plus the net balance of collection rights and those received from third parties, minus payment obligations resulting from invoices on the previous horizon and invoices or drafts on the current horizon.
- Minus the net creditor balance for their own collection rights and those received from third parties, minus payment obligations resulting from invoices on the previous horizon from the time of issuance for a debit or credit note, as established in the rule on "Timetable and deadlines for agents' requests."
- Plus the net debit balance of invoices on the previous horizon, once payment is made.
- Minus the amount of collateral reserved for trading on the intraday continuous market, including reductions made should there not be enough surplus.
- Minus the amount of the estimation of the outstanding payment of the commissions generated by the negative interest applied by the bank to the cash deposits formalized by the agents.
As of midnight on the day of payment plus one day, the preceding horizon will no longer be considered in the collateral balance.
The amount of collateral available to cover the value of the agent’s new debtor bids (purchases at a positive price or sales at a negative price) is constantly calculated by considering:
- The volume of collateral requested by the agent for trading.
- Minus the value of debtor bids in the order book, taxes included.
- Minus payment obligations for debtor bids matched during the current round, taxes included.
- Minus the reduction of available collateral when there is not enough surplus on the Market Operator's Information System.
- Plus the increase in collateral for trading
- Minus the reduction of collateral for trading.
Before a bidding offer at a positive price or a sell offer at a negative price is accepted for matching, it will be checked to see if the agent presenting the bid is acting on their own behalf, in which case the offer will be settled with them if it is matched, or if they are acting on behalf of a third party. In such a case, it will be checked to make sure they're acting in their own name, in which case the offer will be settled with the them, or, if they’re acting in someone else’s name, the offer will be settled with the party represented.
Secondly, it will be verified whether the agent to whom that offer is going to be settled, in the case of a match, has enough collateral balance to cover the value of that offer (the price of the bid times the volume offered).
Should an offer be accepted, the agent will be credited with a reduction in their balance of surplus collateral for the value of that offer, which is called withholding. Once the matching is final, the settlement and pre-invoicing is done, taxes included, and the withholding will be deleted and replaced with a payment obligation that will give rise to the offer, once it is matched.
The acceptance of sale bids at a positive price will not require the existence of prior collateral. Accepted sale bids at a positive price do not change an agent's collateral balance.
Sales offers at a negative price influence the collateral balance in the same way as purchase offers at a positive price.
The release of collateral for payment made shall be carried out on the day of payment no later than the time set in the rule in "Timetable and deadlines for agents' requests.
In addition, and on a voluntary basis, an advance payment can be made per horizon, prior to the issuance of the weekly debit note, releasing their payment obligations before the due date of the invoices and, therefore, reducing the volume of collateral required to operate in the market.
The agents using this procedure have to:
1. Make a deposit into the market operator's account before the last business day prior to the day on which the weekly debit note is issued (the timetable shall be set out in the schedules and timetable document, as is the case for cash collateral deposits).
2. Communicate the pre-payment through the market operator's information system before the aforementioned deadline.
3. As in the case of cash receipts, have a cash balance in the market operator's account to cover the charges that the bank applies to the credit balances in the market operator's account and that the market operator passes on to the market participants in proportion to their cash deposits and prepayments.
The market operator may set a charge on agents when they exceed a certain number of collateral transactions in a set period of time. This charge may be included on their credit or debit note. The fee is 0.1% with a minimum of €25 for each collateral transaction (deposit or refund) that exceeds either the fourth transaction in a given calendar month or the sixth in the previous two months.
Accredited collection rights serve as collateral for purchases made, as well as for future purchases until the debit and credit note is issued.
If, once an agent's debit and credit note is issued, any of their pending payment obligations were not to be covered by the agent’s collateral, the pending collection amount will be withheld and used as cash collateral on collection day.
By default, all agent transfer their collection rights to themselves.
An agent can assign their collection rights to a third party by submitting a form to OMIE, as established in the Market Access Guide. Once accepted by OMIE, the assigning agent will indicate through the market's website the percentages of their earned collection rights they wish to assign to third parties. By default, agents assign 100% of their CR to themselves.
Percentages for sessions that have already been matched cannot be changed.
Entities that collateral may be banks, credit unions, or insurers residing in Spain, or a Spanish branch of a non-resident entity with a minimum credit rating. Detailed information on guarantor requirements can be found in the market rules and in "Instruction 1/2015. On additional conditions for the acceptance of collateral issued by entities that do not meet credit rating criteria established in the market rules." The Market Operator's Information System makes an updated list of the most common entities available, along with their credit rating and a rating of their suitability as guarantors.
Our public website has a section containing extensive information on the formalization of guarantees, as well as the forms, available in several different formats (XML and PDF):
https://www.omie.es/en/formalizing-guarantees
The guarantor entity must only fill out the indicated fields that enable the guarantee to be identified.
The security will be validated when received by OMIE.
The text of guarantee forms must not be altered. No modification of these texts will be accepted. The guarantee must be submitted in Spanish.
This isn't necessary. OMIE reserves the right to request the guarantor entity to ratify the terms of collateral at any time in order to ensure that it is valid and in effect such as to allow enforcement.
The minimum validity for guarantees in electronic format will be 5 months.
An agent can formalize collateral with unlimited validity or with validity extending until a date they choose. In the latter case, in accordance with the collateral’s text, before the fifth business day in Madrid prior to the expiration of the collateral, the agent must substitute new collateral for current collateral in the presence of the Market Operator. Otherwise, enforcement will ensue.
Electronic guarantees in XML and PDF format must be submitted by an appropriate request through the Market Operator's Information System.
We remind you that the formalization of paper guarantees will not be accepted after the 2/2021 Instruction on 19 October, "Formalizing guarantees in OMIE".
The agent will have a period of six additional months to replace the current physical securities with those formalized electronically, this period expires on 12 May 2022.
In accordance with market rules, bank guarantees, surety bonds, lines of credit, or cash collateral deposits must be reported through the Market Operator's Information System.
OMIE will accept the registration application once the collateral has been received and validated, which will for all purposes be considered accepted.
In accordance with market rules, any modifications to amounts or to the effective date of Bank guarantees, insurance guarantees or credit line authorizations must be reported through the Market Operator's Information System.
OMIE will accept the modification request once the collateral has been received and validated, which will for all purposes be considered accepted.
However, in the case of reductions, these can only be accepted if there is sufficient collateral remaining to meet the pending payment obligations
According to market rules, the returns of sureties, surety bonds, lines of credit, or cash collateral must be requested through the Market Operator's Information System.
Requests for the return of any type of collateral can only be accepted if the agent has sufficient collateral remaining to meet their pending payment obligations.
Requests for a reduction or refund of collateral, should it be accepted, will result in the immediate deduction of the requested amount from the agent's balance sheet. Processing the request will be carried out according to established acceptance deadlines.
Refunds of cash collateral will only be made to the account that agents have registered through the Market Operator's Information System.
According to market rules, agents must make a request to the market operator through the Market Operator's Information System for the amount of collateral to be allocated to the Market Operator's Trading Platform, as well as any subsequent increase or decrease they wish to make to that value.
According to market rules, deadlines for the acceptance of agents' reports, notifications, and requests are established in the document titled, "Timetable and deadlines for agents' requests.", published on the Market Operator's Information System.
Requests will be validated by the market operator and should it be accepted, it will be incorporated into calculations for the operating limit the next time the Market Operator's Trading Platform syncs with the Market Operator's Information System
When an application has been processed by OMIE, the agent will receive a task in the Market Operator's Information System indicating whether their application has been accepted or rejected.
Any request for a collateral assignment or increase to operate on the Market Operator's Trading Platform, will be accepted as long as there is enough surplus collateral in the Market Operator's Information System.
In that case, the entry will be corrected in the Market Operator's Information System, and that collateral increase will be considered in calculations of the operational limit for the Market Operator’s Trading Platform the next time the Market Operator's Information System syncs with the Market Operator's Trading Platform.
Any request for a collateral reduction to operate in the intraday continuous market will be validated by the Market Operator's Trading Platform during the next synchronization, and as long as the amount has not been assigned to purchase bids (or sales at a negative price) or to payment obligations, it will be accepted. That reduction will then be considered on the Market Operator's Trading Platform and the withheld collateral on the Market Operator's Information System will be released in that amount. If it is not possible to accept the reduction requested on the Market Operator's Trading Platform, the agent will be notified that their request has been rejected and won't be considered for other synchronizations
In the event of defaulting on a payment, the market operator will enforce the non-complying agent's payment collateral for creditor agents' collection.
If, after the fifth business day in Madrid prior to the expiration or non-renewal of collateral, an Agent has not replaced that collateral with another per the Operating Rules of the Electrical Power Production Day-Ahead and Intraday Markets, the Market Operator will then enforce that guarantee up to the amount needed to meet the Agent's obligations.
The enforcement of a guarantee entails paying a penalty of 0.01% of the enforced amount, with a minimum of €300.
The schedules for replying to requests made by agents set the time limits in which the Market Operator attempts to process those requests, acting with due diligence and in good faith, always strictly respecting the order for acceptance or rejection, attending to when the request was received and the information needed to process it. In outstanding circumstances, the market operator may not meet deadlines, such as, for instance, when a high number of unforeseen requests accumulate.
The Market Operator will pass on to the market agents the negative interest or other charges that the banking entity applies for the balances of the cash deposits formalized in said account as market collateral, as of February 14, 2020, in proportion to these.
The market operator will transfer to the agents the cost charged by the bank in proportion to its average credit balances during the settlement period.
Charges may be integrated in the credit or debit note and may be deducted from the agent's cash collateral. Also, for the purposes of rule 56.7.2 “BALANCE OF GUARANTEES”, the market operator may make a negative entry to consider the estimate of the outstanding payment for the negative interest generated by the cash collateral formalized by the agent.
The maximum rates applicable to cash deposits will be published on the market website, as well as the settlement period, the application conditions and any changes that may occur in them at least one month in advance.
Las Reglas de Funcionamiento del Mercado que entraron en vigor el 3 de marzo de 2023 determinan en las Reglas 56.7 y 57.6.1 el destino que debe darse a los potenciales intereses que se puedan devengar como consecuencia de los saldos mantenidos en las Cuentas del Operador del Mercado.
"Los intereses devengados en esta cuenta, sean positivos o negativos, así como otros cargos que aplique la entidad bancaria por los saldos en efectivo, menos los posibles costes de esta y menos un máximo de 15 puntos básicos de tipo de interés, que podrá conservar el Operador del Mercado en concepto de comisión de gestión, se trasladarán a los agentes que hayan aportado los depósitos en efectivo en proporción a los mismos".
Asimismo, la consulta vinculante V0719-09, emitida por la Dirección General de Tributos del Ministerio de Hacienda recoge que “los ingresos así como las retenciones correspondientes se imputarán a los agentes, y por ello, se devengarán, a medida en que los mismos se devenguen en la cuenta correspondiente”.
El reparto de los eventuales intereses devengados y la correspondiente retención, se realiza con periodicidad trimestral al finalizar el mismo. Las operaciones anteriores son documentadas por el Operador del Mercado mediante la emisión para cada agente de una nota de abono y de la correspondiente factura por la comisión de gestión.
More detailed information on the process for providing collateral can be found in the market rules section, which can be accessed via "Market Rules" → "OMIE Rules."