The Czech Republic became the first emerging market with a functioning and strong exchange, where electricity is bought and sold. The Prague Stock Exchange ("PSE") and UNIVYC, a.s. (clearing and settlement house) established the Prague Energy Exchange ("PXE") in 2007.
CSOB Custody is prepared to provide many services related to the PXE as a clearing bank for our clients. Our main advantage is our renowned responsibility for commitments resulting from exchange trade settlement. The principle of settlement and risk management is based on both the clearing bank and the central counterparty. The central counterparty enters into settlement as the only counterparty of all participants in the market, which results in lower risk for participants, trading and settlement anonymity according to the standardized and transparent European model, with direct control over the entire process from the side of PXE. The credibility of the whole settlement system is supported by the establishment of the Clearing Fund, which collects contributions from all clearing banks. This Fund thus serves as a guarantee.
PXE Trading is based on futures contracts for electricity with physical delivery. Futures contracts are concluded on a yearly, quartely or monthly basis. The yearly contracts cascade into quarters, whereas the quarterly contracts cascade into months. Currently two types of Euro denominated contracts exist: base-load and peak-load. A base load contract stipulates the elecriciy supply for 24 hours per day, every day of the year. On the other hand, a peak load contract defines a period of 12 hours per day, from Monday to Friday delivery. Currently, the Automatic Trade System with the participation of anonymous market maker is applied, however the SPAD trading is being considered for sometime in the future as well.
For more information on PXE see www.pxe.cz 
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Got interested? Contact Mr. Vlastimil Cermak from CSOB Custody!