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Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC

as it stood on 2019-11-28, permalink: /eu-eurlex/32010r1031/2019-11-28

2010-11-122019-11-28

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Outline, 57 provisions

Article 1 Article 2 Article 3 Article 4 Article 5 Article 6 Article 7 Article 8 Article 9 Article 10 Article 11 Article 12 Article 13 Article 14 Article 15 Article 16 Article 17 Article 18 Article 19 Article 20 Article 21 Article 22 Article 23 Article 24 Article 25 Article 26 Article 27 Article 29 Article 30 Article 31 Article 32 Article 34 Article 35 Article 36 Article 44 Article 45 Article 46 Article 47 Article 48 Article 49 Article 50 Article 51 Article 52 Article 53 Article 54 Article 55 Article 56 Article 57 Article 58 Article 59 Article 60 Article 61 Article 62 Article 63 Article 64 Article 65 Article 66

CHAPTER I — GENERAL PROVISIONS

Article 1, Subject matter #art_1

This Regulation provides for rules on the timing, administration and other aspects of the auctioning of allowances under Directive 2003/87/EC.

Article 2, Scope #art_2

This Regulation shall apply to the allocation through auctions of allowances under Chapter II (aviation) of Directive 2003/87/EC and to the allocation through auctions of allowances under Chapter III (stationary installations) of that Directive valid for surrendering in trading periods from 1 January 2013.

Article 3, Definitions #art_3

For the purposes of this Regulation, the following definitions shall apply:

  1. ‘two-day spot’ means allowances auctioned for delivery at an agreed date no later than the second trading day from the day of the auction;

  2. ‘five-day futures’ means allowances auctioned for delivery at an agreed date no later than the fifth trading day from the day of the auction;

  3. ‘bid’ means an offer in an auction to acquire a given volume of allowances at a specified price;

  4. ‘bidding window’ means the time period during which bids may be submitted;

  5. ‘trading day’ means any day during which an auction platform and the clearing system or settlement system connected to it are open for trading;

  6. ‘investment firm’ means the same as in point (1) of Article 4(1) of Directive 2014/65/EU of the European Parliament and of the Council (1);

  7. ‘credit institution’ means the same as in Article 4(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council (2);

  8. ‘financial instrument’ means the same as in point (15) of Article 4(1) of Directive 2014/65/EU;

  9. ‘secondary market’ means the market in which persons buy or sell allowances either before or after they are allocated either free of charge or through auctioning;

  10. ‘parent undertaking’ means the same as in Article 2(9) of Directive 2013/34/EU of the European Parliament and of the Council (3);

  11. ‘subsidiary undertaking’ means the same as in Article 2(10) of Directive 2013/34/EU;

  12. ‘affiliate undertaking’ means the same as in Article 2(12) of Directive 2013/34/EU;

  13. ‘control’ means the same as in Article 3(2) and (3) of Council Regulation No 139/2004 (4) as applied in the Commission’s Consolidated Jurisdictional Notice (5). Recital (22) of that Regulation and paragraphs 52 and 53 of that Notice shall apply for determining the notion of control for state-owned undertakings;

  14. ‘auction process’ means the process encompassing the setting of the auction calendar, the procedures for admission to bid, the procedures for submission of bids, the conduct of the auction, the calculation and announcement of the auction results, the arrangements for payment of the price due, delivery of the allowances and management of the collateral needed to cover any transaction risks, as well as the surveillance and monitoring of the proper conduct of the auctions by an auction platform;

  15. ‘money laundering’ means the same as in Article 1(3) of Directive (EU) 2015/849 of the European Parliament and of the Council (6) having regard to Article 1(4) and (6) of that Directive;

  16. ‘terrorist financing’ means the same as in Article 1(5) of Directive (EU) 2015/849 having regard to Article 1(6) of that Directive;

  17. ‘criminal activity’ means the same as in Article 3(4) of Directive (EU) 2015/849;

  18. ‘auctioneer’ means any public or private entity appointed by a Member State, to auction allowances on its behalf;

  19. ‘nominated holding account’ means one or more type of holding account provided for in the applicable delegated acts adopted pursuant to Article 19(3) of Directive 2003/87/EC for the purposes of participating in or conducting the auction process including the holding of allowances in escrow, pending their delivery under this Regulation;

  20. ‘nominated bank account’ means a bank account designated by an auctioneer, a bidder or its successor in title for the receipt of payments due under this Regulation;

  21. ‘customer due diligence measures’ means the same as the customer due diligence measures in Article 13 of Directive (EU) 2015/849 and the enhanced customer due diligence measures in Article 18, Article 18a and Article 20 having regard to Articles 22 and 23 of that Directive;

  22. ‘beneficial owner’ means the same as in Article 3(6) of Directive (EU) 2015/849;

  23. ‘duly certified copy’ means an authentic copy of an original document that is certified as being a true copy of the original by a qualified lawyer, accountant, notary public or similar professional who is recognised under the national law of the Member State concerned to attest officially as to whether a copy is in fact a true copy of its original;

  24. ‘politically exposed persons’ means the same as in Article 3(9) of Directive (EU) 2015/849;

  25. ‘market abuse’ means the same as in Article 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council (7);

  26. ‘insider dealing’ means the same as in Article 8 of Regulation (EU) No 596/2014 and as prohibited by points (a) and (b) of Article 14 of that Regulation;

28a. ‘unlawful disclosure of inside information’ means the same as in Article 10 of Regulation (EU) No 596/2014 and as prohibited by point (c) of Article 14 of that Regulation;

  1. ‘inside information’ means the same as in Article 7 of Regulation (EU) No 596/2014;

  2. ‘market manipulation’ means the same as in Article 12 of Regulation (EU) No 596/2014 and as prohibited by Article 15 of that Regulation;

  3. ‘clearing system’ means one or more infrastructure connected to the auction platform that can provide clearing, margining, netting, management of collateral, settlement and delivery, and any other services, carried out by a central counterparty, accessed either directly or indirectly through members of the central counterparty who act as intermediaries between their clients and the central counterparty;

  4. ‘clearing’ means all processes preceding the opening of the bidding window, during the bidding window and following the closing of the bidding window until settlement, involving the management of any risks arising during that interval, including margining, netting, or novation, or any other services, carried out possibly by a clearing or settlement system;

  5. ‘margining’ means the process by which collateral is to be pledged by an auctioneer or a bidder, or one or more intermediaries acting on their behalf, to cover a given financial position, encompassing the entire process of measuring, calculating and administering the collateral put up to cover such financial positions, intended to ensure that all payment commitments of a bidder and all delivery commitments of an auctioneer or one or more intermediaries acting on their behalf can be met within a very short period of time;

  6. ‘settlement’ means payment by a successful bidder, or its successor in title, or a central counterparty, or a settlement agent of the sum due for allowances to be delivered to that bidder or its successor in title, or a central counterparty, or a settlement agent, and delivery of the allowances to the successful bidder or its successor in title, or a central counterparty or a settlement agent;

  7. ‘central counterparty’ means an entity which interposes either directly between an auctioneer and a bidder or its successor in title, or between intermediaries representing them, that acts as the exclusive counterparty to each of them guaranteeing the payment of the auction proceeds to the auctioneer or an intermediary representing it or the delivery of the auctioned allowances to the bidder or an intermediary representing it, subject to Article 48;

  8. ‘settlement system’ means any infrastructure whether or not connected to the auction platform that can provide settlement services, which may include clearing, netting, management of collateral, or any other services, which ultimately enable the delivery of allowances on behalf of an auctioneer to a successful bidder or its successor in title, and the payment of the sum due by a successful bidder or its successor in title to an auctioneer, carried out through either of the following: (a) the banking system and the Union registry; (b) one or more settlement agents acting on behalf of an auctioneer and a bidder or its successor in title, accessing the settlement agent either directly or indirectly through members of the settlement agent who act as intermediaries between their clients and the settlement agent;

  9. ‘settlement agent’ means an entity acting as an agent providing accounts to the auction platform, through which accounts instructions for the transfer of the auctioned allowances given by the auctioneer or an intermediary representing it and the payment of the auction clearing price by a successful bidder, its successor in title, or an intermediary representing them are safely executed either simultaneously or nearly simultaneously in a guaranteed manner;

  10. ‘collateral’ means the forms of collateral security referred to in Article 2(m) of Directive 98/26/EC of the European Parliament and of the Council (8), including any allowances accepted as security by the clearing system or settlement system;

  11. ‘regulated market’ means the same as in point (21) of Article 4(1) of Directive 2014/65/EU;

  12. ‘SMEs’ means operators or aircraft operators that are small and medium-sized enterprises within the meaning of Commission Recommendation 2003/361/EC (9);

  13. ‘market operator’ means the same as in point (18) of Article 4(1) of Directive 2014/65/EU;

  14. ‘establishment’ means any of the following: (a) place of residence or permanent address within the Union for the purposes of the third subparagraph of Article 6(3); (b) the same as in point (55)(a) of Article 4(1) of Directive 2014/65/EU taking into account the requirements of Article 5(4) of that Directive for the purposes of Article 18(2) of this Regulation; (c) the same as in point (55)(a) of Article 4(1) of Directive 2014/65/EU taking into account the requirements of Article 5(4) of that Directive for the purposes of Article 19(2) of this Regulation, in the case of persons referred to in point (b) of Article 18(1) of this Regulation; (d) the same as in point (43) of Article 4(1) of Regulation (EU) No 575/2013 for the purposes of Article 19(2) of this Regulation, in the case of persons referred to in point (c) of Article 18(1) of this Regulation; (e) the same as in point (55)(a) of Article 4(1) of Directive 2014/65/EU for the purposes of Article 19(2) of this Regulation in the case of business grouping referred to in point (d) of Article 18(1) of this Regulation; (f) the same as in point (55)(b) of Article 4(1) of Directive 2014/65/EU for the purposes of Article 35(4), (5) and (6) of this Regulation;

  15. ‘exit strategy’ means one or more documents determined in accordance with the contracts appointing the auction platform concerned, setting out detailed measures planned to ensure the following: (a) the transfer of all tangible and intangible assets necessary for the uninterrupted continuation of the auctions and the smooth operation of the auction process by an auction platform’s successor; (b) the provision of all information relating to the auction process, that is necessary for the procurement procedure for the appointment of the auction platform’s successor; (c) the provision of the technical assistance that enables the contracting authorities or the auction platform’s successor or any combination of these, to understand, access or use the relevant information provided pursuant to points (a) and (b).

CHAPTER II — THE DESIGN OF THE AUCTIONS

Article 4, Auctioned products #art_4

1. Allowances shall be offered for sale on an auction platform by means of standardised electronic contracts (‘the auctioned product’).

2. Each Member State shall auction allowances in the form of either two-day spot or five-day futures.

Article 5, Auction format #art_5

Auctions shall be carried out through an auction format whereby bidders shall submit their bids during one given bidding window without seeing bids submitted by other bidders. Each successful bidder shall pay the same auction clearing price as referred to in Article 7 for each allowance regardless of the price bid.

Article 6, Submission and withdrawal of bids #art_6

1. The minimum volume bid for shall be one lot.▼M1One lot auctioned by an auction platform appointed pursuant to Article 26(1) or Article 30(1) shall be 500 allowances.▼M8 —————▼B

2. Each bid shall state the following:(a) the identity of the bidder and whether the bidder is bidding on its own account or on behalf of a client;(b) where the bidder is bidding on behalf of a client, the identity of the client;▼M8(c) the volume bid as a number of allowances in integral multiples of lots of 500 allowances;▼B(d) the price bid in euros for each allowance specified to two decimal points.

3. Each bid may only be submitted, modified or withdrawn during a given bidding window.Bids submitted may be modified or withdrawn by a given deadline before the close of the bidding window. Such deadline shall be set by the auction platform concerned and published on that auction platform’s website at least five trading days prior to the opening of the bidding window.Only a natural person established in the Union appointed pursuant to Article 19(2)(d) and authorised to bind a bidder for all purposes relating to the auctions including the submission of a bid (the ‘bidder’s representative’) is entitled to submit, modify or withdraw a bid on behalf of a bidder.Once submitted, each bid shall be binding, unless it is withdrawn or modified pursuant to this paragraph or withdrawn pursuant to paragraph 4.

4. Where the relevant auction platform is satisfied that a genuine mistake has been made in the submission of a bid, it may, upon request of the bidder’s representative, treat the mistakenly submitted bid as withdrawn after the close of the bidding window, but before the auction clearing price has been determined.

5. The reception, transmission and submission of a bid by an investment firm or credit institution on any auction platform shall be deemed to constitute an investment service within the meaning of point (2) of Article 4(1) of Directive 2014/65/EU.

Article 7, Auction clearing price and resolution of tied bids #art_7

1. The auction clearing price shall be determined upon closure of the bidding window.

2. An auction platform shall sort bids submitted to it in the order of the price bid. Where the price of several bids is the same, these bids shall be sorted through a random selection according to an algorithm determined by the auction platform before the auction.The volumes bid shall be added up, starting with the highest bid price. The price of the bid at which the sum of the volumes bid matches or exceeds the volume of allowances auctioned shall be the auction clearing price.

3. All bids making up the sum of the volumes bid determined pursuant to paragraph 2 shall be allocated at the auction clearing price.

4. Where the total volume of successful bids determined pursuant to paragraph 2 exceeds the volume of auctioned allowances, the remaining volume of the auctioned allowances shall be allocated to the bidder that has submitted the last bid making up the sum of the volumes bid.

5. Where the total volume of bids sorted pursuant to paragraph 2 falls short of the volume of auctioned allowances, the auction platform shall cancel the auction.

6. Where the auction clearing price is significantly under the price on the secondary market prevailing during and immediately before the bidding window when taking into account the short term volatility of the price of allowances over a defined period preceding the auction, the auction platform shall cancel the auction.

7. Before an auction is started, the auction platform shall determine the methodology for the application of paragraph 6 of this Article, after consulting the relevant contracting authority pursuant to Article 26(1) or Article 30(5), and notifying the competent national authorities referred to in Article 56.

In between two bidding windows on the same auction platform, the auction platform concerned may modify the methodology. It shall notify the relevant contracting authority pursuant to Article 26(1) or Article 30(5) and the competent national authorities referred to in Article 56 without delay.

The auction platform concerned shall take the utmost account of the opinion of the relevant contracting authority, where provided.

8. Where an auction of allowances covered by Chapter III of Directive 2003/87/EC is cancelled, its volume shall be distributed evenly over the next four auctions scheduled on the same auction platform. Where the Member State volume from cancelled auctions may not be distributed evenly in accordance with the first sentence, the Member State concerned shall auction those allowances over less than four auctions in volumes pursuant to Article 6(1) of this Regulation.

Where an auction of allowances covered by Chapter II of Directive 2003/87/EC is cancelled, its volume shall be distributed evenly over the next two auctions scheduled on the same auction platform. Where the Member State volume from cancelled auctions may not be distributed evenly in accordance with the previous sentence, the Member State concerned shall auction these allowances in the first following auction in volumes pursuant to Article 6(1) of this Regulation.

Where an auction that already includes volumes from a previously cancelled auction is cancelled, its volume shall be spread in accordance with the first and second subparagraphs starting from the first auction which is not subject to other adjustments due to previous cancellations.

CHAPTER III — AUCTION CALENDAR

Article 8, Timing and frequency #art_8

1. An auction platform shall conduct auctions separately through its own regularly recurring bidding window. The bidding window shall be opened and closed on the same trading day. The bidding window shall be kept open for no less than two hours. The bidding windows of any two or more auction platforms may not overlap and there shall be at least a two-hour delay between two consecutive bidding windows.

2. The auction platform shall determine the dates and times of the auctions taking account of public holidays that affect international financial markets and any other relevant events or circumstances that, in view of the auction platform, might affect the proper conduct of the auctions necessitating changes. No auctions shall be held in the two weeks over Christmas and New Year of each year.

3. In exceptional circumstances, any auction platform may, after consulting the Commission, change the times of any bidding window, by giving notice to all persons likely to be affected. The auction platform concerned shall take the utmost account of the Commission’s opinion, where delivered.

4. As from the sixth auction or earlier, the auction platform appointed pursuant to Article 26(1) of this Regulation shall conduct auctions of allowances covered by Chapter III of Directive 2003/87/EC at least on a weekly basis and auctions of allowances covered by Chapter II of Directive 2003/87/EC at least on a two-monthly basis.

No other auction platform shall conduct an auction on any of a maximum of two days a week during which an auction platform appointed pursuant to Article 26(1) conducts an auction. Where the auction platform appointed pursuant to Article 26(1) conducts auctions on more than two days a week, it shall determine and publish on which two days no other auctions may take place. It shall do so no later than when it makes the determination and publication referred to in Article 11.

5. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned on the auction platform appointed pursuant to Article 26(1) of this Regulation shall be distributed evenly over the auctions held in a given year, except that volumes auctioned in August of each year shall be half of the volume auctioned in auctions held in other months of the year.

The volume of allowances covered by Chapter II of Directive 2003/87/EC to be auctioned on the auction platform appointed pursuant to Article 26(1) of this Regulation shall in principle be distributed evenly over the auctions held in a given year, except that volumes auctioned in August of each year shall be half of the volume auctioned in auctions held in other months of the year.

Where the annual auction volume of allowances of a Member State may not be distributed evenly over the auctions in a given year in lots of 500 allowances in accordance with Article 6(1), the relevant auction platform shall distribute that volume over fewer auction dates, ensuring that the volume is at least auctioned on a quarterly basis.

6. Additional provisions on the timing and frequency of the auctions conducted by any auction platform other than the auction platforms appointed pursuant to Article 26(1) are set out in Article 32.

Article 9, Circumstances preventing the conduct of auctions #art_9

Without prejudice to the application of the rules referred in Article 58 where appropriate, an auction platform may cancel an auction where the proper conduct of that auction is disrupted or is likely to be disrupted. The volume of allowances of the cancelled auctions shall be distributed pursuant to Article 7(8).

Article 10, Annual volumes of the auctioned allowances covered by Chapter III of Directive 2003/87/EC #art_10

1. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in any given calendar year as from 2019 shall be the quantity of allowances established in accordance with Articles 10(1) and 10(1a) of that Directive.

2. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in any given calendar year by each Member State shall be based on the volume of allowances pursuant to paragraph 1 of this Article and the share of allowances of that Member State determined pursuant to Article 10(2) of that Directive.

3. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned each calendar year by each Member State pursuant to paragraphs 1 and 2 of this Article shall take into account Article 10a(5a) of Directive 2003/87/EC, the changes to be made pursuant to Articles 1(5) and (8) of Decision (EU) 2015/1814 of the European Parliament and of the Council (10), the changes pursuant to Articles 10c, 12(4), 24, 27 and 27a of Directive 2003/87/EC, and pursuant to Article 6 of Regulation (EU) 2018/842 of the European Parliament and of the Council (11).

4. Without prejudice to Decision (EU) 2015/1814, any subsequent change to the volume of allowances to be auctioned in a given calendar year shall be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

In exceptional circumstances, in particular where the cumulative annual value of such changes does not exceed 50 000 allowances for a given Member State, these changes may be accounted for in the volume of allowances to be auctioned in subsequent calendar years, unless a Member State requests the Commission by 30 April 2020 that this threshold shall not apply to it for the period starting from 2021.

Any volume of allowances that may not be auctioned in a given calendar year due to the rounding required by Article 6(1) shall be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

5. The volume of allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in 2020 shall also include the volume of 50 million unallocated allowances from the market stability reserve referred to in the second subparagraph of Article 10a(8) of that Directive. Those allowances shall be divided in equal amounts between the Member States participating in the joint action pursuant to Article 26(1) of this Regulation as at 1 January 2018 and shall be added to the volume of allowances to be auctioned for each of them. The volume of 50 million allowances shall in principle be distributed evenly over the auctions held in 2020.

Article 11, Calendar for individual auctions of allowances covered by Chapter III of Directive 2003/87/EC auctioned by auction platforms appointed pursuant to Article 26(1) of this Regulation #art_11

The auction platforms appointed pursuant to Article 26(1) of this Regulation shall determine the auction calendar, including the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances covered by Chapter III of Directive 2003/87/EC to be auctioned in individual auctions each calendar year having previously consulted the Commission. The auction platforms concerned shall publish the auction calendar by 15 July of the previous year or as soon as practicable thereafter, provided that the Commission has instructed the central administrator of the European Union Transaction Log (‘EUTL’) to enter the auction table corresponding to the auction calendar into the EUTL in accordance with the delegated acts adopted pursuant to Article 19(3) of Directive 2003/87/EC.

Article 12, Annual volumes of auctioned allowances covered by Chapter II of Directive 2003/87/EC #art_12

1. The volume of allowances covered by Chapter II of Directive 2003/87/EC to be auctioned each year shall be 15 % of the expected volume of those allowances in circulation for that year. Where the auctioned volume in a given year is more or less than 15 % of the volume actually put in circulation for that year, the volume to be auctioned in the subsequent year shall correct for the difference. Any allowances that remain to be auctioned after the last year of a trading period shall be auctioned in the first four months of the subsequent year. ►M8 Article 10(4) shall apply to any subsequent change to the volume of allowances to be auctioned.** ◄ **The volume of allowances to be auctioned in the final year of each trading period shall take account of allowances remaining in the special reserve referred to in Article 3f of Directive 2003/87/EC.

2. For each calendar year in a given trading period, the volume of allowances covered by Chapter II of Directive 2003/87/EC to be auctioned by each Member State shall be determined on the basis of the volume pursuant to paragraph 1 of this Article and the share of that Member State determined in accordance with Article 3d(3) of Directive 2003/87/EC.

Article 13, Calendar for individual auctions of allowances covered by Chapter II of Directive 2003/87/EC auctioned by auction platforms appointed pursuant to Article 26(1) of this Regulation #art_13

2. The auction platforms appointed pursuant to Article 26(1) of this Regulation shall determine the auction calendars, including the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances covered by Chapter II of Directive 2003/87/EC to be auctioned in individual auctions for each calendar year, having previously consulted the Commission. The auction platforms concerned shall publish the auction calendar by 30 September of the previous year, or as soon as practicable thereafter provided that the Commission has instructed the central administrator of the EUTL to enter the auction table corresponding to the auction calendar into the EUTL in accordance with the delegated acts adopted pursuant to Article 19(3) of Directive 2003/87/EC. Without prejudice to the deadline for publication of the auction calendar for allowances covered by Chapter III of Directive 2003/87/EC under Article 11 of this Regulation, the auction platforms concerned may simultaneously determine the auction calendars for allowances covered by Chapter II and Chapter III of Directive 2003/87/EC.▼BThe bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances covered by Chapter II of Directive 2003/87/EC to be auctioned in individual auctions for the final year of each trading period, may be adjusted by the auction platform concerned to take account of allowances remaining in the special reserve referred to in Article 3f of that Directive.

3. The auction platforms appointed pursuant to Article 26(1) of this Regulation shall base their determinations and publications under paragraph 2 of this Article on the Commission’s decision adopted pursuant to Article 3e(3) of Directive 2003/87/EC.

4. The provisions on the calendar for individual auctions of allowances covered by Chapter II of Directive 2003/87/EC conducted by an auction platform other than the auction platforms appointed pursuant to Article 26(1) of this Regulation shall be determined and published pursuant to Article 32 of this Regulation.

Article 32 shall also apply with respect to the auctions conducted pursuant to the second subparagraph of Article 30(7) by the auction platform appointed pursuant to Article 26(1).

Article 14, Adjustments of the auction calendar #art_14

1. The determinations and publications of the annual volumes to be auctioned and of the bidding windows, volumes, dates, auctioned product, payment and delivery dates in connection with individual auctions pursuant to Articles 10 to 13 and Article 32(4) shall not be modified except for adjustments due to any of the following:(a) the cancellation of an auction pursuant to Article 7(5) and (6), Article 9 and Article 32(5);▼M8(b) any suspension of an auction platform other than the auction platforms appointed pursuant to Article 26(1) of this Regulation provided for in the delegated acts adopted pursuant to Article 19(3) of Directive 2003/87/EC;▼B(c) any decision by a Member State made pursuant to Article 30(8);(d) any settlement failure referred to in Article 45(5);(e) any allowances remaining in the special reserve referred to in Article 3f of Directive 2003/87/EC;▼M8(f) allowances remaining in the reserve for new entrants provided for in Article 10a(7) of Directive 2003/87/EC and allowances not allocated pursuant to Article 10c of that Directive;▼B(g) any unilateral inclusion of additional activities and gases pursuant to Article 24 of Directive 2003/87/EC;(h) any measures adopted pursuant to Article 29a of Directive 2003/87/EC;(i) the entry into force of amendments to this Regulation or to Directive 2003/87/EC;▼M8(j) any withholding of allowances from the auctions pursuant to Article 22(5);▼M6(k) the necessity for an auction platform to avoid conducting an auction in breach of this Regulation or Directive 2003/87/EC;▼M8(l) adjustments necessary pursuant to Decision (EU) 2015/1814 which shall be determined and published by 15 July of the given year, or as soon as practicable thereafter;▼M8(m) cancellation of allowances pursuant to Article 12(4) of Directive 2003/87/EC.

2. Where the manner in which a modification is to be implemented is not provided for in this Regulation, the auction platform concerned shall not implement that modification until it has previously consulted the Commission. Articles 11 and 13(2) shall apply.

CHAPTER IV — ACCESS TO THE AUCTIONS

Article 15, Persons who may submit bids directly in an auction #art_15

Only a person who is eligible to apply for admission to bid pursuant to Article 18 and is admitted to bid pursuant to Articles 19 and 20 may submit bids directly in an auction.

Article 16, Means of access #art_16

1. An auction platform shall provide for the means to access its auctions on a non-discriminatory basis.

1a. Admission to the auctions shall not be dependent on becoming a member of or a participant in the secondary market organised by the auction platform or any other trading place operated by the auction platform or by any third party.

2. An auction platform appointed pursuant to Article 26(1) or 30(1) shall ensure that its auctions can be accessed remotely by means of an electronic interface accessible securely and reliably through the Internet.

In addition, an auction platform appointed pursuant to Article 26(1) or 30(1) may offer bidders the option of accessing its auctions through dedicated connections to the electronic interface.

3. An auction platform may offer, and Member States may require an auction platform to offer, one or more alternative means of accessing its auctions, should the main means of access be inaccessible for whatever reason, provided that such alternative means of access are secure and reliable and their use does not lead to any discrimination between bidders.

Article 17, Training and helpline #art_17

An auction platform appointed pursuant to Article 26(1) or 30(1) shall offer a practical web-based training module on the auction process it is conducting, including guidance on how to complete and submit any forms and a simulation of how to bid in an auction. It shall also make available a helpline service accessible by telephone, facsimile and electronic mail at least during the working hours of each trading day.

Article 18, Persons eligible to apply for admission to bid #art_18

1. The following persons shall be eligible to apply for admission to bid directly in auctions:▼M4(a) an operator or an aircraft operator having an operator holding account or an aircraft operator holding account, bidding on its own account, including any parent undertaking, subsidiary undertaking or affiliate undertaking forming part of the same group of undertakings as the operator or the aircraft operator;▼M8(b) investment firms authorised under Directive 2014/65/EU bidding on their own account or on behalf of their clients;(c) credit institutions authorised under Directive 2013/36/EU of the European Parliament and of the Council (12) bidding on their own account or on behalf of their clients;▼B(d) business groupings of persons listed in point (a) bidding on their own account and acting as an agent on behalf of their members;(e) public bodies or state-owned entities of the Member States that control any of the persons listed in point (a).

2. Without prejudice to the exemption in Article 2(1)(j) of Directive 2014/65/EU, persons covered by this exemption and authorised pursuant to Article 59 of this Regulation shall be eligible to apply for admission to bid directly in the auctions either on their own account or on behalf of clients of their main business provided that a Member State where they are established has enacted legislation enabling the relevant competent national authority in that Member State to authorise them to bid on their own account or on behalf of clients of their main business.

4. Where the persons referred to in paragraph 1(b) and (c) and paragraph 2 bid on behalf of their clients, they shall ensure that those clients are themselves eligible to apply for admission to bid directly under paragraphs 1 or 2.Where the clients of the persons referred to in the first subparagraph are themselves bidding on behalf of their own clients, they shall ensure that those clients are also eligible to apply for admission to bid directly under paragraphs 1 or 2. The same shall apply to all further clients down the chain bidding indirectly in the auctions.

5. The following persons shall not be eligible to apply for admission to bid directly in auctions nor may they participate in auctions through one or more persons admitted to bid pursuant to Articles 19 and 20, whether for their own account or on behalf of any other person, where they fulfil their role with respect to the auctions in question:(a) the auctioneer;(b) the auction platform including any clearing system and any settlement system connected to it;(c) persons who are in a position to exercise, directly or indirectly, significant influence over the management of the persons under points (a) and (b);(d) persons working for persons under points (a) and (b).

7. The option made available pursuant to Articles 44 to 50 for an auction platform, including any clearing system or settlement system connected to it, to accept payment, make delivery or take collateral, from a successor in title to a successful bidder shall not undermine the application of Articles 17 to 20.

Article 19, Requirements for admission to bid #art_19

1. Members or participants of the secondary market organised by an auction platform appointed pursuant to Article 26(1) or 30(1) that are eligible persons pursuant to Article 18(1) or (2) shall be admitted to bid directly in the auctions conducted by that auction platform without any further admission requirements, provided that all of the following conditions are fulfilled:(a) the requirements for admission of the member or participant to trade allowances through the secondary market organised by the auction platform appointed pursuant to Article 26(1) or 30(1) are no less stringent than those listed under paragraph 2 of this Article;(b) the auction platform appointed pursuant to Article 26(1) or 30(1) receives any additional information necessary to verify the fulfilment of any requirements referred to in paragraph 2 of this Article that have not been previously verified.

2. Persons, who are not members or participants of the secondary market organised by an auction platform appointed pursuant to Article 26(1) or 30(1), and that are eligible persons pursuant to Article 18(1) or (2) shall be admitted to bid directly in the auctions conducted by that auction platform provided that they:(a) are established in the Union, an operator or an aircraft operator;(b) hold a nominated holding account;(c) hold a nominated bank account;(d) appoint at least one bidder’s representative as defined in the third subparagraph of Article 6(3);(e) satisfy the auction platform concerned in line with applicable customer due diligence measures as to their identity, the identity of their beneficial owners, integrity, business and trading profile having regard to the means of establishing the relationship with the bidder, the type of bidder, the nature of the auctioned product, the size of prospective bids, and the means of payment and delivery;(f) satisfy the auction platform concerned of their financial standing, in particular, that they are able to meet their financial commitments and current liabilities as they fall due;(g) have in place or are able to put in place when requested, the internal processes, procedures and contractual agreements necessary to give effect to a maximum bid-size imposed pursuant to Article 57;(h) fulfil the requirements of Article 49(1).

3. Persons falling under the scope of Article 18(1)(b) and (c) or Article 18(2) submitting bids on behalf of their clients shall be responsible for ensuring that all of the following conditions are fulfilled:(a) their clients are eligible persons pursuant to Article 18(1) or (2);(b) they have or will have in good time before the opening of the bidding window adequate internal processes, procedures and contractual agreements necessary to:(i) enable them to process bids from their clients including the submission of bids, collection of payment and transfer of allowances;(ii) prevent the disclosure of confidential information from that part of their business responsible for receiving, preparing and submitting bids on behalf of their clients to that part of their business responsible for preparing and submitting bids on their own account;(iii) ensure that their clients who themselves are acting on behalf of clients bidding in the auctions apply the requirements set out in paragraph 2 of this Article and in this paragraph and that they require the same of their clients and of the clients of their clients as provided for in Article 18(4).The auction platform concerned may rely on reliable checks carried out by the persons referred to in the first subparagraph of this paragraph, their clients, or the clients of their clients as provided for in Article 18(4).Persons referred to in the first subparagraph of this paragraph shall be responsible for ensuring that they are able to demonstrate to the auction platform whenever requested to do so by the auction platform pursuant to Article 20(5)(d) that the conditions in points (a) and (b) of the first subparagraph of this paragraph are fulfilled.

Article 20, Submission and processing of applications for admission to bid #art_20

1. Before submitting their first bid directly through any auction platform appointed pursuant to Article 26(1) or 30(1), persons eligible under Article 18(1) or (2) shall apply to the auction platform concerned for admission to bid.

Members of or participants in the secondary market organised by the auction platform concerned fulfilling the requirements of Article 19(1) shall be admitted to bid without applying under the first subparagraph of this paragraph.

2. An application for admission to bid made under paragraph 1 shall be made by submitting a completed application form to the auction platform. The application form and its access through the internet shall be provided and maintained by the auction platform concerned.

3. An application for admission to bid shall be supported by duly certified copies of all supporting documents required by the auction platform to show that the applicant satisfies the requirements of Article 19(2) and (3). An application for admission to bid shall at least include the elements listed in Annex II.

4. An application for admission to bid, including any supporting documents, shall upon request be made available for inspection by the competent national law enforcement authorities of a Member State conducting an investigation, referred to in Article 62(3)(e) and any competent Union bodies involved in investigations conducted on a cross-border basis.

5. An auction platform appointed pursuant to Article 26(1) or 30(1) may refuse admission to bid in its auctions if the applicant refuses any of the following:(a) to comply with requests made by the auction platform for additional information or clarification or substantiation of information provided;(b) to attend an invitation made by the auction platform to interview any officers of the applicant including at its business premises or elsewhere;(c) to allow investigations or verifications, requested by the auction platform including on-site visits or spot-checks at the applicant’s business premises;(d) to comply with requests made by the auction platform for any information required from an applicant, the clients of an applicant or the clients of their clients as provided for in Article 18(4) to check compliance with the requirements of Article 19(3);(e) to comply with requests made by the auction platform for any information required to check compliance with the requirements of Article 19(2).

7. An auction platform appointed pursuant to Article 26(1) or 30(1) shall require an applicant for admission to bid in its auctions to ensure that clients of the applicant comply with any request made pursuant to paragraph 5 and that any client of the applicant’s clients as provided for in Article 18(4) does the same.

8. An application for admission shall be deemed to be withdrawn if the applicant fails to submit information requested by an auction platform within a reasonable period specified in a request for information made pursuant to point (a), (d) or (e) of paragraph 5, by the auction platform concerned, which shall not be less than five trading days from the date of the request for information, or fails to respond or submit to or cooperate in an interview or any investigations or verifications under point (b) or (c) of paragraph 5.

9. An applicant shall not provide any auction platform appointed pursuant to Article 26(1) or 30(1), with false or misleading information. An applicant shall notify the auction platform concerned fully, frankly and promptly of any changes in its circumstances that could affect its application for admission to bid in auctions conducted by that auction platform or any admission to bid already granted to it.

10. An auction platform appointed pursuant to Article 26(1) or 30(1) shall decide on an application submitted to it and notify its decision to the applicant.

The auction platform concerned may:

(a) grant unconditional admission to the auctions for a period not exceeding the term of its appointment, including any extension or renewal of that appointment;

(b) grant conditional admission to the auctions for a period not exceeding the term of its appointment, subject to fulfilment of the specified conditions, by a given date, which shall be duly verified by the auction platform concerned;

(c) refuse to grant admission.

Article 21, Refusal, revocation or suspension of admission #art_21

1. An auction platform appointed pursuant to Article 26(1) or 30(1) shall refuse to grant admission to bid in its auctions, revoke or suspend any admission to bid already granted to any person who:(a) is not or is no longer eligible to apply for admission to bid under Article 18(1) or (2);(b) does not or no longer meets the requirements of Articles 18, 19 and 20;(c) is wilfully or repeatedly in breach of this Regulation, the terms and conditions of its admission to bid in the auctions conducted by the auction platform concerned or any other related instructions or agreements.

2. An auction platform appointed pursuant to Article 26(1) or 30(1) shall refuse to grant admission to bid in its auctions, revoke or suspend any admission to bid already granted, if it suspects money laundering, terrorist financing, criminal activity or market abuse in relation to an applicant, provided that such refusal, revocation or suspension is unlikely to frustrate efforts by the competent national authorities, to pursue or apprehend the perpetrators of such activities.

In such a case, the auction platform concerned shall report to the financial intelligence unit referred to in Article 32 of Directive (EU) 2015/849 (‘FIU’) in accordance with Article 55(2) of this Regulation.

3. An auction platform appointed pursuant to Article 26(1) or 30(1) may refuse to grant admission to bid in its auctions, revoke or suspend any admission to bid already granted, to any person:(a) who is negligently in breach of this Regulation, the terms and conditions of its admission to bid in the auctions conducted by the auction platform concerned or any other related instructions or agreements;(b) who has otherwise behaved in a manner that is prejudicial to the orderly or efficient conduct of an auction;(c) who is referred to in Article 18(1)(b) or (c) or Article 18(2) and has not bid in any auction during the preceding 220 trading days.

4. Persons referred to in paragraph 3 shall be notified of the refusal to grant admission, or the revocation or suspension of admission, and be given a reasonable period, specified in the decision of refusal to admit, revocation or suspension of admission, to respond in writing.After considering the person’s written response, the auction platform concerned shall if warranted:(a) grant or reinstate admission with effect from a given date;(b) grant conditional admission or conditional reinstatement of admission subject to fulfilment of the specified conditions by a given date, which shall be duly verified by the auction platform concerned;(c) confirm the refusal to grant admission, the revocation or suspension of admission with effect from a given date.The auction platform shall notify the person in question of its decision.

5. Persons whose admission to bid is revoked or suspended pursuant to paragraphs 1, 2 or 3 shall take reasonable steps to ensure that their removal from the auctions:(a) is orderly;(b) does not prejudice the interests of their clients or interfere with the efficient functioning of the auctions;(c) does not affect their obligations to comply with any payment provisions, the terms and conditions of their admission to bid in the auctions or any other related instructions or agreements;(d) does not compromise their obligations regarding the protection of confidential information pursuant to Article 19(3)(b)(ii) which shall remain in force for 20 years following their removal from the auctions.The refusal to grant admission, the revocation or suspension of admission, referred to in paragraphs 1, 2 and 3, shall specify any measures needed to comply with this paragraph and the auction platform shall verify compliance with such measures.

CHAPTER V — APPOINTMENT OF THE AUCTIONEER AND ITS FUNCTIONS

Article 22, Appointment of the auctioneer #art_22

1. Each Member State shall appoint an auctioneer. No Member State shall auction allowances without appointing an auctioneer. More than one Member State may appoint the same auctioneer.

2. The auctioneer shall be appointed by the appointing Member State in good time prior to the commencement of the auctions so as to conclude and implement the necessary arrangements with the auction platform appointed or to be appointed by that Member State, including any clearing system and settlement system connected to it, allowing the auctioneer to auction allowances on behalf of the appointing Member State upon mutually agreed terms and conditions.

3. For Member States not participating in the joint actions as provided in Article 26(1), the auctioneer shall be appointed by the appointing Member State so as to conclude and implement the necessary arrangements with the auction platforms appointed pursuant to Article 26(1), including any clearing system and settlement system connected to them, to enable the auctioneer to auction allowances on behalf of the appointing Member State on such auction platforms upon mutually agreed terms and conditions, pursuant to the second subparagraph of Article 30(7) and the first subparagraph of Article 30(8).

4. Member States shall refrain from disclosing inside information to persons working for the auctioneer unless the person working or acting for the Member State makes such disclosure on a need-to-know basis in the normal course of the exercise of their employment, profession or duties and the Member State concerned is satisfied that the auctioneer has in place appropriate measures to prevent insider dealing, or the unlawful disclosure of inside information by any person working for an auctioneer, additional to the measures provided for in Articles 18(8) and 19(10) of Regulation (EU) No 596/2014.

5. The allowances to be auctioned on behalf of a Member State shall be withheld from the auctions whenever that Member State does not have in place a duly appointed auctioneer or whenever the arrangements referred to in paragraph 2 are not concluded or in force.

6. Paragraph 5 is without prejudice to any legal consequences arising under Union law from a Member State failing to fulfil its obligations under paragraphs 1 to 4.

7. Member States shall notify the identity of the auctioneer and its contact details to the Commission.The auctioneer’s identity and contact details shall be published on the Commission’s website.

Article 23, The auctioneer's functions #art_23

1. The auctioneer shall carry out the following functions:(a) auction the volume of allowances to be auctioned by each Member State appointing it;(b) receive the auction proceeds due to each Member State appointing it;(c) disburse the auction proceeds due to each Member State appointing it.

2. The auctioneer of each Member State auctioning allowances pursuant to Article 10(5) shall receive the auction proceeds from those allowances on an auctioneer's nominated bank account designated by it no later than 1 October 2019 for the receipt of payments due under Article 10(5). The auctioneer shall ensure that these auction proceeds are disbursed to the account notified to it by the Commission for the purposes of Article 10a(8) of Directive 2003/87/EC, at the latest 15 days following the end of the month within which the auction proceeds were generated. The auctioneer may deduct prior to disbursement any additional fees for their holding and disbursement, subject to the prior notification of the amount and the reason for these fees by its Member State to the Commission and all other Member States.

CHAPTER VI

Article 24, Auctioning of allowances for the Innovation Fund and the Modernisation Fund #art_24

1. The European Investment Bank (EIB) shall be the auctioneer for the allowances to be auctioned from 2021 pursuant to the first subparagraph of Article 10a(8) and to Article 10d(4) of Directive 2003/87/EC on the auction platform appointed pursuant to Article 26(1) of this Regulation. Articles 22(2), 22(4), 23(1) and 52(1) shall apply mutatis mutandis to the EIB. The EIB as auctioneer shall ensure that the auction proceeds for the purposes of Article 10a(8) of Directive 2003/87/EC are disbursed to an account notified to it by the Commission, at the latest 15 days following the end of the month within which the auction proceeds were generated. It may deduct prior to disbursement any additional fees for their holding and disbursement, in accordance with the agreement concluded between the Commission and the EIB pursuant to Article 20(3) of Commission Delegated Regulation (EU) 2019/856 (13).

2. The annual auction volumes of allowances pursuant to paragraph 1 shall be auctioned together with the annual volumes to be auctioned by the Member States participating in the joint action pursuant to Article 26(1) of this Regulation and shall be evenly distributed in accordance with Article 8(5) of this Regulation.

3. The volumes of allowances pursuant to Article 10a(8) of Directive 2003/87/EC shall, in principle, be auctioned in equal annual volumes over the ten-year period beginning from 1 January 2021.

The Commission shall review the distribution of allowances remaining to be auctioned after the award decision of each call for proposals carried out in accordance with the delegated acts adopted pursuant to the fourth subparagraph of Article 10a(8) of Directive 2003/87/EC. Such reviews shall take place every two years, with the first review taking place no later than 30 June 2022. Each review shall pay particular attention to the support available for future calls for proposals, the maximum amount of the Innovation Fund support available for project development assistance, the part of the total amount of the Innovation Fund support available for the call to small-scale projects reserved by the Commission, the support foreseen for the awarded projects as well as the disbursement and the recovery rate.

Article 25, Procedure for cancellation of allowances pursuant to Article 12(4) of Directive 2003/87/EC #art_25

1. Any Member State that intends to cancel allowances from its total quantity of allowances to be auctioned in the event of closure of the electricity generation capacity in its territory pursuant to Article 12(4) of Directive 2003/87/EC shall notify the Commission of its intention at the latest by 31 December of the calendar year following the year of the closure, using the template set out in Annex I to this Regulation.

2. The volume of allowances to be cancelled pursuant to Article 12(4) of Directive 2003/87/EC shall be deducted from the volume to be auctioned by the Member State concerned established pursuant to Article 10 of this Regulation after any adjustments pursuant to Decision (EU) 2015/1814.

3. The Commission shall publish the information provided by the Member States in accordance with Annex I except for the reports referred to in point 6 of that Annex.

CHAPTER VII — APPOINTMENT OF AN AUCTION PLATFORM BY MEMBER STATES PARTICIPATING IN A JOINT ACTION WITH THE COMMISSION AND ITS FUNCTIONS

Article 26, Appointment of an auction platform through joint action of the Member States with the Commission #art_26

1. Without prejudice to Article 30, Member States shall appoint an auction platform to auction allowances pursuant to Article 27 following a joint procurement procedure between the Commission and the Member States participating in the joint action pursuant to this Article.

3. The joint procurement procedure referred to in paragraph 1 shall be conducted pursuant to Article 165(2) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (14).

4. Any period of appointment of the auction platforms referred to in paragraph 1 shall be no longer than five years. Where the conditions under Article 172(3) of Regulation (EU, Euratom) 2018/1046 are fulfilled, the Member States and the Commission may extend the maximum period of appointment of the auction platform to seven years. During the contract duration, the Commission may conduct a preliminary market consultation in accordance with Article 166(1) of Regulation (EU, Euratom) 2018/1046 with a view to verify the market conditions and to prepare the new procurement procedure.

5. The identity and contact details of the auction platforms referred to in paragraph 1 shall be published on the Commission’s website.

6. Any Member State that joins the joint actions as provided in paragraph 1 after the entry into force of the joint procurement agreement entered into between the Commission and the Member States participating in that action shall accept the terms and conditions agreed by the Commission and the Member States joining the joint action prior to the entry into force of that agreement as well as any decisions already adopted under that agreement.

Any Member State that decides pursuant to Article 30(4) not to participate in the joint action as provided in paragraph 1 of this Article but to appoint its own auction platform may be given observer status upon terms and conditions agreed in the joint procurement agreement between the Member States participating in the joint action as provided in paragraph 1 and the Commission subject to any applicable public procurement rules.

Article 27, Functions of the auction platform appointed pursuant to Article 26(1) #art_27

1. The auction platform appointed pursuant to Article 26(1) shall provide the following services to the Member States as more particularly delineated in the contract appointing it:(a) providing access to the auctions, pursuant to Articles 15 to 21, including the provision and maintenance of the necessary internet-based electronic interfaces and website;(b) conducting the auctions in accordance with Articles 4 to 7;(c) managing the auction calendar in accordance with Articles 8 to 14;(d) announcing and notifying the results of an auction, pursuant to Article 61;(e) providing, or ensuring ►M1 through sub-contracting** ◄ ** the provision of, the requisite clearing system or settlement system needed for:(i) the handling of payments made by successful bidders or their successors in title and distribution of the proceeds of the auctions to the auctioneer, pursuant to Articles 44 and 45;(ii) delivering the auctioned allowances to successful bidders or their successors in title, pursuant to Articles 46, 47 and 48;(iii) managing collateral including any margining, provided by the auctioneer or bidders, pursuant to Articles 49 and 50;▼M8(f) providing the Commission with any information relating to the conduct of the auctions pursuant to Article 53;(g) surveying the auctions, notifying suspicions of money laundering, terrorist financing, criminal activity or market abuse, administering any required remedial measures or sanctions including the provision of an extra-judicial dispute resolution mechanism, pursuant to Article 54 to 59 and Article 64(1);▼M8(h) reporting, pursuant to Article 36.▼B

2. At least 20 trading days prior to the opening of the first bidding window run by the auction platform appointed pursuant to Article 26(1), the auction platform shall be connected to at least one clearing system or settlement system.

3. Within three months from the date of its appointment, the auction platform shall submit its detailed exit strategy to the Commission.

Article 29, Services provided to the Commission by the auction platforms appointed pursuant to Article 26(1) #art_29

Auction platforms appointed pursuant to Article 26(1) shall provide the Commission with technical support services with respect to the Commission’s work relating to the following:

(a) any coordination of the auction calendar for Annex III;

(d) the reports by the Commission pursuant to Articles 10(5) of Directive 2003/87/EC;

(f) any review of this Regulation, Directive 2003/87/EC or the delegated acts adopted pursuant to Article 19(3) of that Directive which has an impact on the functioning of the carbon market including the implementation of the auctions;

(g) any other joint action relating to the functioning of the carbon market including the implementation of the auctions agreed between the Commission and the Member States participating in the joint action.

CHAPTER VIII — APPOINTMENT OF AUCTION PLATFORMS BY MEMBER STATES OPTING TO HAVE THEIR OWN AUCTION PLATFORM AND THEIR FUNCTIONS

Article 30, Appointment of any auction platform other than an auction platform appointed pursuant to Article 26(1) #art_30

1. Any Member State not participating in the joint action as provided in Article 26(1) may appoint its own auction platform for the auctioning of its volume of allowances covered by Chapters II and III of Directive 2003/87/EC to be auctioned as provided for in Article 31(1) of this Regulation.

3. Member States not participating in the joint action as provided in Article 26(1) may appoint the same auction platform or separate auction platforms for the auctioning pursuant to Article 31(1).

4. Any Member State not participating in the joint action as provided in Article 26(1), shall inform the Commission of its decision not to participate in the joint action as provided in Article 26(1) but to appoint its own auction platform pursuant to paragraph 1 of this Article within 3 months of the entry into force of this Regulation.

5. Any Member State not participating in the joint action as provided in Article 26(1) shall select its own auction platform appointed pursuant to paragraph 1 of this Article on the basis of a selection procedure compliant with Union and national procurement law where a public procurement process is required by either Union or national law, respectively. The selection procedure shall be subject to all applicable remedies and enforcement procedures under Union and national law.

Any period of appointment of the auction platform referred to in paragraph 1 shall be no longer than 3 years renewable for no more than a further 2 years.

The appointment of the auction platforms referred to in paragraph 1 shall be subject to listing the auction platform concerned in Annex III pursuant to paragraph 7. It shall not be implemented before the entry into force of the listing of the auction platform concerned in Annex III as provided for in paragraph 7.

6. ►M8 Each Member State not participating in the joint action as provided for in Article 26(1) but opting to appoint its own auction platform pursuant to paragraph 1 of this Article shall provide the Commission with a complete notification containing all of the following:** ◄ **(a) the identity of the auction platform it proposes to appoint;▼M6(b) the detailed operative rules that would govern the auction process to be conducted by the auction platform(s) it proposes to appoint, including the contractual provisions concerning the appointment of the auction platform concerned including any clearing system(s) and settlement system(s) connected to the proposed auction platform stipulating the terms and conditions governing the structure and level of fees, collateral management, payment and delivery;▼M8(c) the auctioned product and any information necessary for the Commission to assess whether the envisaged auction calendar is compatible with any prevailing or envisaged auction calendar of the auction platforms appointed pursuant to Article 26(1) as well as other auction calendars proposed by other Member States not participating in the joint action provided for in Article 26 but opting to appoint their own auction platforms;▼M1(d) the detailed rules and conditions on surveying and supervising the auctions to which its proposed auction platform shall be subject pursuant to Article 35(4), (5) and (6) as well as the detailed rules protecting against money laundering, terrorist financing, criminal activity or market abuse, including any remedial measures or sanctions;(e) the detailed measures put in place to comply with Article 22(4) and Article 34 regarding the appointment of the auctioneer.

7. Auction platforms other than those appointed pursuant to Article 26(1), the Member States appointing them, their term of appointment, and any applicable conditions or obligations, shall be set out in Annex III where the requirements of this Regulation and the objectives of Article 10(4) of Directive 2003/87/EC are satisfied. The Commission shall act solely on the basis of these requirements and objectives and shall have full regard to any information submitted by the Member State concerned.

In case a Member State having appointed its own auction platform decides to appoint the same auction platform under the same conditions and obligations as per the listing provided for in the first subparagraph, this listing shall continue to be valid where that Member State and the Commission confirm that the requirements of this Regulation and the objectives of Article 10(4) of Directive 2003/87/EC are satisfied. To this end, the Member State shall, in particular, provide a notification containing the information referred to in paragraph 6 to the Commission and share any relevant information with the other Member States. The Commission shall inform the public about the extended validity of the listing.

In the absence of any listing provided for in the first subparagraph, a Member State not participating in the joint action as provided in Article 26(1) but opting to appoint its own auction platform pursuant to paragraph 1 of this Article shall use the auction platforms appointed pursuant to Article 26(1) to auction its share of allowances that would have otherwise been auctioned on the auction platform to be appointed pursuant to paragraph 1 of this Article in the period until the expiry of 3 months after the entry into force of the listing provided for in the first subparagraph.

Without prejudice to paragraph 8, a Member State not participating in the joint action as provided in Article 26(1) but opting to appoint its own auction platform pursuant to paragraph 1 of this Article may nevertheless participate in the joint action for the sole purpose of being able to make use of the auction platforms appointed pursuant to Article 26(1) as provided in the third subparagraph. Such participation shall take place in accordance with the provisions of the second subparagraph of Article 26(6) and subject to the terms and conditions of the joint procurement agreement.

8. Any Member State not participating in the joint action as provided in Article 26(1) but opting to appoint its own auction platform pursuant to paragraph 1 of this Article may join the joint action provided for in Article 26, pursuant to Article 26(6).

The volume of allowances that were scheduled to be auctioned on an auction platform other than the auction platforms appointed pursuant to Article 26(1) shall be spread evenly over the auctions conducted by the relevant auction platform appointed pursuant to Article 26(1).

Article 31, Functions of auction platforms other than the auction platforms appointed pursuant to Article 26(1) #art_31

1. Any auction platform appointed pursuant to Article 30(1) shall carry out the same functions as the auction platform appointed pursuant to Article 26(1) as provided for in Article 27.

However, an auction platform appointed pursuant to Article 30(1) shall be exempted from the provisions of Article 27(1)(c) and it shall submit the exit strategy referred to in Article 27(3) to the appointing Member State.

►M8

3. The provisions on the auction calendar provided for in Article 8(1), (2) and (3), Articles 9, 10, 12, 14 and 32 shall apply to the auction platforms appointed pursuant to Article 30(1).

◄

Article 32, Auction calendar for any auction platform other than the auction platforms appointed pursuant to Article 26(1) #art_32

1. The volume of allowances covered by Chapter III of Directive 2003/87/EC auctioned in individual auctions conducted by an auction platform appointed pursuant to Article 30(1) of this Regulation shall be no greater than 20 million allowances and no less than 3,5 million allowances; save where the total volume of allowances, covered by Chapter III of Directive 2003/87/EC, to be auctioned by the appointing Member State is less than 3,5 million in a given calendar year, in which case the allowances shall be auctioned in a single auction per calendar year. However, the volume of allowances covered by Chapter III of Directive 2003/87/EC auctioned in an individual auction conducted by those auction platforms shall be no less than 1,5 million allowances in the respective periods of 12 months when a number of allowances is to be deducted from the volume of allowances to be auctioned pursuant to Article 1(5) of Decision (EU) 2015/1814.

2. The volume of allowances covered by Chapter II of Directive 2003/87/EC auctioned in individual auctions conducted by an auction platform appointed pursuant to Article 30(1) of this Regulation shall be no greater than 5 million allowances and no less than 2,5 million allowances; save where the total volume of allowances, covered by Chapter II of Directive 2003/87/EC, to be auctioned by the appointing Member State is less than 2,5 million in a given calendar year, in which case the allowances shall be auctioned in a single auction per calendar year.

3. The total volume of allowances covered by Chapters II and III of Directive 2003/87/EC to be auctioned by all auction platforms appointed pursuant to Article 30(1) of this Regulation collectively shall be distributed evenly over any given calendar year, except that the volume auctioned in auctions held in August of each year shall be half of the volume auctioned in other months of the year. These requirements shall be considered to be met where each auction platform appointed pursuant to Article 30(1) meets these requirements individually.

4. The auction platforms appointed pursuant to Article 30(1) of this Regulation shall determine the auction calendar, including the bidding windows, individual volumes, auction dates as well as the auctioned product, payment and delivery dates of the allowances to be auctioned in individual auctions each year, having previously consulted the Commission. The auction platforms concerned shall make their determination of the individual auction volumes in accordance with Articles 10 and 12.

The auction platforms concerned shall publish the auction calendar for the allowances covered by Chapter II of Directive 2003/87/EC, by 31 October of the previous year or as soon as practicable thereafter, and for those covered by Chapter III of that Directive, by 15 July of the previous year or as soon as practicable thereafter, provided that the Commission has instructed the central administrator of the EUTL to enter the respective auction table into the EUTL in accordance with the delegated acts adopted pursuant to Article 19(3) of Directive 2003/87/EC. The auction platforms concerned shall make their determination and publication of the auction calendars only after the determination and publication pursuant to Articles 11 and 13(2) of this Regulation by the auction platforms appointed pursuant to Article 26(1) of this Regulation, unless such an auction platform has not yet been appointed. Without prejudice to the deadline for publication of the auction calendar for allowances covered by Chapter III of Directive 2003/87/EC, the auction platforms concerned may simultaneously determine the auction calendars for allowances covered by Chapter II and Chapter III of Directive 2003/87/EC.

Published calendars shall be consistent with any relevant conditions or obligations listed in Annex III.

5. Where an auction conducted by an auction platform appointed pursuant to Article 30(1) is cancelled by the auction platform pursuant to Article 7(5) or (6) or Article 9, the auctioned volume shall be distributed either pursuant to Article 7(8) or, if the auction platform concerned conducts less than four auctions in a given calendar year, over the next two auctions scheduled on the same auction platform.

CHAPTER IX — APPOINTMENT REQUIREMENTS APPLICABLE TO THE AUCTIONEER AND ANY AUCTION PLATFORM

Article 34, Appointment requirements applicable to the auctioneer #art_34

1. ►M8 When appointing auctioneers, the Member States shall take into account the extent to which candidates:** ◄ **(a) exhibit the least risk of conflict of interest or market abuse having regard to the following:(i) any activities on the secondary market;(ii) any internal processes and procedures to mitigate the risk of conflict of interest or market abuse;▼M8(b) are able to fulfil the auctioneer’s functions, in a timely manner, in accordance with the highest professional and quality standards.▼B

2. The auctioneer’s appointment shall be subject to the conclusion of the arrangements referred to in Article 22(2) and (3) between the auctioneer and the auction platform concerned.

Article 35, Appointment requirements applicable to any auction platform #art_35

1. Auctions shall only be conducted on an auction platform authorised as a regulated market whose operator organises a secondary market in allowances or allowances derivatives.

Without prejudice to the first subparagraph, where it is foreseen in the procurement documents for the joint procurement procedure pursuant to Article 26(1), a regulated market whose operator organises a wholesale energy market as defined in Article 2(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council (15), but does not organise a secondary market in allowances or allowances derivatives, may participate in the procurement procedure pursuant to Article 26(1) of this Regulation. In that case, where such regulated market is appointed as auction platform pursuant to Article 26(1) and its operator does not organise a secondary market in allowances or allowances derivatives by the time of publication of the procurement procedure pursuant to Article 26(1), that operator shall acquire an authorisation and shall organise a secondary market in allowances or allowances derivatives at least 60 trading days prior to the opening of the first bidding window run by the auction platform concerned.

2. Any auction platform appointed under this Regulation for the auctioning of two-day spot or five-days futures shall be allowed, without further legal or administrative requirements by the Member States, to provide appropriate arrangements so as to facilitate access to and participation in auctions by bidders referred to in Article 18(1) and (2).

3. When appointing any auction platform, the Member States shall take into account the extent to which candidates demonstrate fulfilment of all of the following:(a) ensuring respect of the principle of non-discrimination both de facto and de jure;▼M8(b) full, fair and equitable access to bid in the auctions for SMEs covered by the Union scheme and access to bid in the auctions for small emitters, as defined in Articles 27(1), 27a(1) and 28a(6) of Directive 2003/87/EC;▼B(c) ensuring cost-efficiency and avoiding undue administrative burden;(d) robust auction supervision, notification of suspicions of money laundering, terrorist financing, criminal activity or market abuse, administration of any required remedial measures or sanctions, including the provision of an extra-judicial dispute resolution mechanism;(e) avoiding distortions of competition in the internal market including the carbon market;(f) ensuring the proper functioning of the carbon market including the implementation of the auctions;(g) connecting to one or more clearing system or settlement system;(h) the provision of adequate measures requiring an auction platform to hand over all tangible and intangible assets necessary for the conduct of the auctions by an auction platform’s successor.

4. An auction platform may only be appointed pursuant to Article 26(1) or 30(1) of this Regulation where the Member State where the candidate regulated market and its market operator are established has ensured that the national measures transposing Title III of Directive 2014/65/EU apply to the auctioning of two-day spot or five-day futures to the extent relevant.An auction platform shall only be appointed pursuant to Articles 26(1) and 30(1) of this Regulation after the Member State, where the candidate regulated market and its market operator are established, has ensured that the competent authorities of that Member State are able to authorise and supervise them in accordance with the national measures transposing Title VI of Directive 2014/65/EU to the extent relevant.▼BWhere the candidate regulated market and its market operator are not established in the same Member State, the first and second subparagraphs shall apply to both the Member State where the candidate regulated market is established and the Member State where its market operator is established.

5. The competent national authorities of the Member State referred to in the second subparagraph of paragraph 4 of this Article designated under Article 67(1) of Directive 2014/65/EU shall decide on the authorisation of a regulated market appointed, or to be appointed, pursuant to Article 26(1) or 30(1) of this Regulation, provided that the regulated market and its market operator comply with the provisions of Title III of Directive 2014/65/EU, as transposed into the national legal order of the Member State of their establishment pursuant to paragraph 4 of this Article. The decision on authorisation shall be taken in accordance with Title VI of Directive 2014/65/EU as transposed into the national legal order of the Member State of their establishment pursuant to paragraph 4 of this Article.

6. The competent national authorities referred to in paragraph 5 of this Article shall maintain effective market oversight and take the necessary measures to ensure that the requirements referred to in that paragraph are complied with. To that effect, they shall be able to exercise directly, or with the assistance of other competent national authorities designated pursuant to Article 67(1) of Directive 2014/65/EU, the powers provided for in the national measures transposing Article 69 of that Directive with regard to the regulated market and its market operator referred to in paragraph 4 of this Article.

The Member State of each competent national authority referred in paragraph 5 of this Article shall ensure that the national measures transposing Articles 70, 71 and 74 of Directive 2014/65/EU apply in relation to the persons responsible for failure to comply with their obligations under Title III of Directive 2014/65/EU as transposed into the national legal order of the Member State of their establishment pursuant to paragraph 4 of this Article.

For the purposes of this paragraph, national measures transposing Articles 79 to 87 of Directive 2014/65/EU shall apply to cooperation between competent national authorities of different Member States and with European Securities and Markets Authority established pursuant to Regulation (EU) No 1095/2010 of the European Parliament and of the Council (16).

CHAPTER X — REPORTING ON TRANSACTIONS

Article 36, Obligation to report transactions #art_36

1. The auction platform shall report to the competent national authority designated pursuant to Article 67(1) of Directive 2014/65/EU the complete and accurate details of every transaction executed on the auction platform that results in the transfer of emission allowances to the successful bidders.

2. The reports on the transactions pursuant to paragraph 1 shall be submitted as quickly as possible, and no later than the close of the trading day following the transaction concerned.

3. Where the successful bidder is a legal person, the auction platform shall, in reporting the designation to identify the successful bidder as required under paragraph 5 of this Article, use a legal entity identifier referred to in Article 5 of Commission Delegated Regulation (EU) 2017/590 (17).

4. The auction platform shall be responsible for the completeness, accuracy and timely submission of the reports. Insofar as there are details to transactions which are not available to the auction platforms, the bidders and the auctioneers shall submit such information to the auction platform.

Where there are errors or omissions in the transaction reports, the auction platform reporting the transaction shall correct the information and submit a corrected report to the competent national authority.

5. The report pursuant to paragraph 1 of this Article shall, in particular, include the name of the allowances or allowances derivatives, the quantity bought, the dates and times of execution, the transaction prices, a designation to identify the successful bidders, and if applicable, the clients on whose behalf the transaction was executed.

The report shall be drawn up using data standards and formats established in the Commission Delegated Regulation (EU) 2017/590 and shall include all the relevant details referred to in Annex I of Commission Delegated Regulation (EU) 2017/590.

CHAPTER XI — PAYMENT AND TRANSFER OF THE AUCTION PROCEEDS

Article 44, Payment by successful bidders and transfer of proceeds to the Member States #art_44

1. Each successful bidder or its successor(s) in title, including any intermediaries acting on their behalf, shall pay the sum due notified to it pursuant to Article 61(3)(c) for the allowances won as notified to it pursuant to Article 61(3)(a), by transferring or arranging for the transfer of the sum due through the clearing system or settlement system, into the auctioneer’s nominated bank account in cleared funds either before or at the latest upon delivery of the allowances into the bidder’s nominated holding account or the nominated holding account of its successor in title.

2. An auction platform including the clearing system(s) or settlement system(s) connected to it shall transfer the payments made by the bidders or any successors in title arising from the auctioning of allowances covered by Chapters II and III of Directive 2003/87/EC to the auctioneers that auctioned the allowances in question.

3. Payments to the auctioneers shall be made in euros or in the currency of the appointing Member State where that Member State is not member of the euro-zone, at the option of the Member State concerned, regardless of what currency payments are made by the bidders, provided that the clearing system or settlement system concerned is capable of handling the national currency in question.The exchange rate shall be the rate published on a recognised financial newswire service specified in the contract appointing the auction platform concerned, immediately following the close of the bidding window.

Article 45, Consequences of late or non-payment #art_45

1. A successful bidder, or its successors in title, shall only be delivered allowances notified to the successful bidder pursuant to Article 61(3)(a), if the entire sum due notified to it pursuant to Article 61(3)(c), is paid to the auctioneer pursuant to Article 44(1).

2. A successful bidder, or its successors in title, that fails to meet its obligations under paragraph 1 of this Article in full by the due date notified to the successful bidder pursuant to Article 61(3)(d) shall be in default of payment.

3. A bidder in default of payment may be charged either or both of the following:(a) interest for each day beginning with the date on which payment was due pursuant to Article 61(3)(d) and ending on the date on which payment is made at an interest rate set out in the contract appointing the auction platform concerned, calculated on a daily basis;(b) a penalty, which shall accrue to the auctioneer less any costs deducted by the clearing system or settlement system.

4. Without prejudice to paragraphs 1, 2 and 3, where a successful bidder is in default of payment one of the following shall occur:(a) the central counterparty shall interpose to take delivery of the allowances and effect payment of the sum due to the auctioneer;(b) the settlement agent shall apply collateral taken from the bidder to effect payment of the sum due to the auctioneer.

5. In the event of a failure of settlement, the allowances shall be auctioned at the next two auctions scheduled on the auction platform concerned.

CHAPTER XII — DELIVERY OF THE AUCTIONED ALLOWANCES

Article 46, Transfer of the auctioned allowances #art_46

Allowances auctioned by any auction platform shall be transferred by the Union registry prior to the opening of a bidding window, into a nominated holding account, to be held in escrow by the clearing system or settlement system acting as custodian, until delivery of the allowances to successful bidders or their successors in title, pursuant to the results of the auction, as provided for in the applicable delegated acts adopted pursuant to Article 19(3) of Directive 2003/87/EC.

Article 47, Delivering the auctioned allowances #art_47

1. The clearing system or settlement system shall allocate each allowance auctioned by a Member State to a successful bidder, until the total volume allocated matches the volume of allowances notified to the bidder pursuant to Article 61(3)(a).A bidder may be allocated allowances from more than one Member State auctioning in the same auction if necessary to make up the volume of allowances notified to the bidder pursuant to Article 61(3)(a).

2. Upon payment of the sum due, pursuant to Article 44(1), each successful bidder or its successors in title shall be delivered the allowances allocated to that bidder, as soon as practicable and in any event no later than the deadline for their delivery by transferring the allowances notified to the bidder pursuant to Article 61(3)(a) from a nominated holding account held in escrow by the clearing system or settlement system acting as custodian, in whole or in part into one or more nominated holding accounts held by the successful bidder or by its successors in title, or into a nominated holding account held in escrow by a clearing system or settlement system acting as custodian for the successful bidder or its successors in title.

Article 48, Late delivery of the auctioned allowances #art_48

1. Where the clearing system or settlement system fails to deliver the whole or part of the auctioned allowances due to circumstances outside its control, the clearing system or settlement system shall deliver the allowances at the earliest opportunity and the successful bidders or their successors in title shall accept delivery at that later date.

2. The remedy provided for in paragraph 1 shall be the sole remedy to which a successful bidder or its successors in title shall be entitled to in case of any failure to deliver auctioned allowances, due to circumstances outside the control of the clearing system or settlement system concerned.

CHAPTER XIII — MANAGEMENT OF COLLATERAL

Article 49, Collateral given by the bidder #art_49

1. Prior to the opening of the bidding window for the auctioning of two-day spot or five-day futures, bidders or any intermediaries acting on their behalf, shall be required to give collateral.

2. If so requested, any unused collateral posted by an unsuccessful bidder, together with any interest accrued on cash collateral, shall be released, as soon as practicable after the close of the bidding window.

3. If so requested, any collateral posted by a successful bidder that has not been used for settlement, together with any interest accrued on cash collateral, shall be released, as soon as practicable after settlement.

Article 50, Collateral given by the auctioneer #art_50

1. Prior to the opening of the bidding window for the auctioning of two-day spot or five-day futures, the auctioneer shall only be required to give allowances as collateral to be held in escrow by the clearing system or settlement system acting as custodian, pending their delivery.

3. Where any allowances given as collateral under ►M1 paragraph 1** ◄ ** are not used, the clearing system or settlement system may retain them, at the option of the auctioning Member State, in a nominated holding account held in escrow by the clearing system or settlement system acting as custodian, pending their delivery.

CHAPTER XIV — FEES AND COSTS

Article 51, Structure and level of fees #art_51

1. The structure and level of fees as well as any related conditions applied by any auction platform and the clearing system(s) and settlement system(s) shall be no less favourable than comparable standard fees and conditions applied on the secondary market.

Without prejudice to the first subparagraph, where it is foreseen in the procurement documents for the procurement procedures pursuant to Article 26(1) or Article 30(5), the operator of the auction platform may increase the fees paid by the successful bidders pursuant to Article 52(1) of this Regulation to a maximum of 120 % of the comparable standard fees paid by the successful buyers of allowances on the secondary market during the years when the auction volumes are reduced by more than 200 million allowances pursuant to Decision (EU) 2015/1814.

2. Any auction platform and the clearing system(s) and settlement system(s) may only apply fees, deductions or conditions explicitly set out in the contract appointing them.

3. All fees and conditions applied pursuant to paragraphs 1 and 2 shall be clearly stated, easily understandable and publicly available. They shall be itemised indicating each charge made for each type of service.

Article 52, Costs of the auction process #art_52

1. Without prejudice to paragraph 2, the costs of the services provided for in Articles 27(1) and Article 31 shall be paid for through fees paid by the bidders, except that any cost of the arrangements between the auctioneer and the auction platform referred to in Article 22(2) and (3) allowing the auctioneer to auction allowances on behalf of the appointing Member State, but excluding the costs of any clearing or settlement system connected to the auction platform concerned, shall be borne by the auctioning Member State.

The costs referred to in the first subparagraph shall be deducted from the auction proceeds payable to the auctioneers, pursuant to Article 44(2) and (3).

2. Without prejudice to the third subparagraph, the terms and conditions of the joint procurement agreement, referred to in the first subparagraph of Article 26(6) or the contract appointing an auction platform pursuant to Article 26(1) may derogate from paragraph 1 of this Article by requiring Member States that have notified the Commission pursuant to Article 30(4) of their decision not to participate in the joint action as provided in Article 26(1), but subsequently make use of the auction platform appointed pursuant to Article 26(1), to pay to the auction platform concerned, including the clearing system(s) or settlement system(s) connected to it, the costs of the services provided for in Article 27(1) related to the volume of allowances which that Member State auctions from the date when that Member State commences auctioning through the auction platform appointed pursuant to Article 26(1) until the termination or expiry of the term of appointment of that auction platform.The foregoing shall also apply to Member States that have not joined the joint action as provided in Article 26(1) within 6 months of the entry into force of the joint procurement agreement referred to in the first subparagraph of Article 26(6).The first subparagraph shall not apply where a Member State joins the joint action as provided in Article 26(1) following the expiry of the appointment period referred to in the second subparagraph of Article 30(5), or where it uses the auction platform appointed pursuant to Article 26(1) to auction its share of allowances in the absence of a listing, pursuant to Article 30(7), of an auction platform that has been notified pursuant to Article 30(6).▼BThe costs borne by bidders under paragraph 1 shall be reduced by the amount of the costs borne by a Member State under this paragraph.

CHAPTER XV — AUCTION SURVEILLANCE, REMEDIAL MEASURES AND SANCTIONS

Article 53, Monitoring of auctions #art_53

1. By the end of each month, the auction platform appointed pursuant to Article 26(1) or Article 30(1) shall report on the implementation of the auctions it conducted in the preceding month in particular with respect to:(a) fair and open access;(b) transparency;(c) price formation;(d) technical and operational aspects of the implementation of the contract appointing the auction platform concerned;(e) the relationship between the auction processes and the secondary market in respect of the information under points (a) to (d);(f) any evidence of anti-competitive behaviour, market abuse, money laundering, terrorist financing or criminal activity that the auction platform has been made aware while carrying out its functions pursuant to Article 27 or Article 31(1);(g) any breach of this Regulation or non-conformity with the objectives of Article 10(4) of Directive 2003/87/EC that the auction platform has been made aware while carrying out its functions pursuant to Article 27 or Article 31(1) of this Regulation;(h) follow-up to any information reported under points (a) to (g).In addition, by 31 January of each year, the auction platform shall also provide a summary and an analysis of these monthly reports of the previous year.

2. The auction platform appointed pursuant to Article 26(1) or Article 30(1) of this Regulation shall provide the reports under paragraph 1 to the Commission, its appointing Member States and its competent national authority designated in accordance with Article 22 of Regulation (EU) No 596/2014.

3. The relevant contracting authorities shall monitor the implementation of the contracts appointing the auction platforms. The Member States appointing an auction platform pursuant to Article 30(1) shall notify the Commission of any failure of that auction platform to comply with the contract appointing it that would be likely to have a significant impact on the auction processes.

4. In accordance with Article 10(4) of Directive 2003/87/EC the Commission, on behalf of the Member States participating in the joint action pursuant to Article 26(1), and the Member States appointing an auction platform pursuant to Article 30(1) shall publish summary reports in respect of the elements listed in points (a) to (h) of paragraph 1 of this Article.

5. Auctioneers, auction platforms and the competent national authorities supervising them shall actively cooperate and, upon request, provide the Commission with any information in their possession relating to the auctions, as is reasonably required for the monitoring of the auctions.

6. The competent national authorities supervising credit institutions and investment firms and the competent national authorities supervising persons authorised to submit bids on behalf of others pursuant to Article 18(2) shall, within their competence, actively cooperate with the Commission, as is reasonably required for the monitoring of the auctions.

7. The obligations imposed on the competent national authorities in paragraphs 5 and 6 shall take into account professional secrecy considerations to which they are subject under Union law.

Article 54, Monitoring the relationship with bidders #art_54

1. An auction platform appointed pursuant to Article 26(1) or 30(1) shall monitor the relationship with bidders admitted to bid in its auctions throughout its subsistence, by doing the following:(a) scrutinising bids made throughout the course of that relationship to ensure that the bidding behaviour of bidders is consistent with the auction platform’s knowledge of the customer, its business and risk profile, including, where necessary, the source of funds;(b) maintaining effective arrangements and procedures for the regular monitoring of the compliance by persons admitted to bid pursuant to Article 19(1), (2) and (3) with its market conduct rules;▼M8(c) monitoring transactions undertaken by persons admitted to bid pursuant to Articles 19(1), (2) and (3) and by persons as defined in Article 3(26) using its systems in order to identify breaches of the rules referred to in point (b) of this subparagraph, unfair or disorderly auctioning conditions or conduct that may invoke market abuse.▼M1

Where scrutinising bids in accordance with point (a) of the first subparagraph, the auction platform concerned shall pay particular attention to any activity which it regards as particularly likely, by its nature, to be related to money laundering, terrorist financing or criminal activity.

2. An auction platform appointed pursuant to Article 26(1) or 30(1) shall ensure that the documents, data or information it holds on a bidder are kept up-to-date. For this purpose, such an auction platform may:▼M8(a) request any information of the bidder, pursuant to Article 19(2) and (3) and Article 20(5) and (7), for the purposes of monitoring the relationship with that bidder following its admission to bid in the auctions, throughout the subsistence of that relationship and for a period of 5 years following its termination;▼M1(b) require any person admitted to bid to re-submit an application for admission to bid at regular intervals;▼M8(c) require any person admitted to bid to promptly notify the auction platform concerned of any changes to the information submitted to it pursuant to Article 19(2) and (3) and Article 20(5) and (7).▼M1

3. An auction platform appointed pursuant to Article 26(1) or 30(1) shall keep records of:(a) the application for admission to bid submitted by an applicant, pursuant to Article 19(2) and (3), including any amendments thereto;(b) the checks carried out in:(i) processing the application for admission to bid submitted, pursuant to Articles 19, 20 and 21;(ii) scrutinising and monitoring the relationship, pursuant to points (a) and (c) of paragraph 1, following an applicant’s admission to bid;(c) all information relating to a given bid submitted by a given bidder in an auction, including any withdrawal or modification of such bids, pursuant to the second subparagraph of Article 6(3) and Article 6(4);(d) all information relating to the conduct of each auction in which a bidder has submitted a bid.

4. An auction platform appointed pursuant to Article 26(1) or 30(1) shall keep the records referred to in paragraph 3 for as long as a bidder is admitted to bid in its auctions and for at least 5 years following the termination of the relationship with that bidder.

Article 55, Notification of money laundering, terrorist financing or criminal activity #art_55

1. The competent national authorities referred to in Article 48(1) of Directive (EU) 2015/849 shall monitor and take the necessary measures to ensure compliance of an auction platform appointed pursuant to Article 26(1) or 30(1) of this Regulation with the customer due diligence measures referred to in Article 19(2)(e) and Article 20(10) of this Regulation, with the obligation to refuse to grant admission to bid, revoke or suspend any admission to bid already granted pursuant to Article 21(1) and (2) of this Regulation, with the monitoring and record keeping requirements of Article 54 of this Regulation and with the notification requirements of the paragraphs 2 and 3 of this Article.

The competent national authorities referred to in the first subparagraph shall have the powers provided for in the national measures transposing Article 48(2) and (3) of Directive (EU) 2015/849.

An auction platform appointed pursuant to Article 26(1) or 30(1) may be held liable for infringements of Article 20(7) and (10), Article 21(1) and (2), and Article 54 of this Regulation and paragraphs 2 and 3 of this Article. The national measures transposing Articles 58 to 62 of Directive (EU) 2015/849 shall apply in this regard.

2. An auction platform appointed pursuant to Article 26(1) or 30(1), its directors and employees, shall cooperate fully with the FIU by promptly:(a) informing the FIU, including by filing a report, on their own initiative, where they know, suspect or have reasonable grounds to suspect that funds in relation to the auctions, regardless of the amount involved, are the proceeds of criminal activity or are related to terrorist financing, and by promptly responding to requests by the FIU for additional information in such cases;(b) providing the FIU directly, at its request, with all necessary information.All suspicious transactions, including attempted transactions, shall be reported.

3. The information referred to in paragraph 2 shall be forwarded to the FIU of the Member State in whose territory the auction platform concerned is situated.

The national measures transposing the compliance management and communication policies and procedures, referred to in Article 33(2) of Directive (EU) 2015/849, shall designate the person or persons responsible for forwarding information pursuant to this Article.

4. The Member State in whose territory an auction platform appointed pursuant to Article 26(1) or 30(1) of this Regulation is situated shall ensure that the national measures transposing Articles 37 to 39, 42, Article 45(1) and Article 46 of Directive (EU) 2015/849 apply to the auction platform concerned.

Article 56, Notification of market abuse #art_56

1. An auction platform appointed pursuant to Article 26(1) or 30(1) of this Regulation, shall report to the competent national authorities in accordance with Article 16 of Regulation (EU) No 596/2014 and with the national measures transposing Article 54 of Directive 2014/65/EU, suspicions of market abuse or attempted market abuse by any person admitted to bid in the auctions or by any person on whose behalf the person admitted to bid in the auctions is acting.

2. The auction platform concerned shall notify the Commission of the fact that it has made a notification under paragraph 1, stating what remedial action it has taken or proposes to take to counter the wrongdoing referred to in paragraph 1.

Article 57, Maximum bid-size and other remedial measures #art_57

1. A maximum bid-size, or any other remedial measures necessary to mitigate an actual or potential discernible risk of market abuse, money laundering, terrorist financing or other criminal activity, as well as anti-competitive behaviour, may be imposed by any auction platform after consulting the Commission and obtaining its opinion thereon, provided that implementation of a maximum bid-size or any other remedial measures would effectively mitigate the risk in question. The Commission may consult the Member States concerned and obtain their opinion on the proposal made by the auction platform concerned. The auction platform concerned shall take the utmost account of the Commission’s opinion.

2. The maximum bid-size shall either be expressed as a percentage of the total number of auctioned allowances in any given auction or a percentage of the total number of auctioned allowances in any given year, whichever may be most appropriate to deal with the risk of market abuse.

3. For the purposes of this Article, maximum bid-size means the maximum number of allowances that may be bid for, directly or indirectly, by any group of persons listed in Article 18(1) or (2), which belong to any of the following categories:(a) the same group of undertakings including any parent undertakings, its subsidiary undertakings and affiliate undertakings;(b) the same business grouping;(c) a separate economic unit having an independent power of decision where they are controlled, directly or indirectly, by public bodies or state-owned entities.

Article 58, Market conduct rules or any other contractual arrangements #art_58

Articles 53 to 57 shall be without prejudice to any other action that an auction platform appointed pursuant to Article 26(1) or 30(1) is entitled to take under its market conduct rules or any other contractual arrangements in place, directly or indirectly, with any bidders admitted to bid in the auctions, provided that such action does not conflict with or undermine the provisions of Articles 53 to 57.

Article 59, Conduct rules for other persons authorised to bid on behalf of others pursuant to Article 18(1)(b) and (c) and Article 18(2) #art_59

1. This Article shall apply to:(a) persons authorised to bid pursuant to Article 18(2).▼M8 —————▼B

2. Persons referred to in paragraph 1 shall apply the following conduct rules in their relationship with their clients:(a) they shall accept instructions from their clients on comparable terms;▼M8(b) they shall refuse to bid on behalf of a client if they have reasonable grounds to suspect money laundering, terrorist financing, criminal activity or market abuse, subject to national legislation transposing Articles 35 and 39 of Directive (EU) 2015/849;▼B(c) they may refuse to bid on behalf of a client if they have reasonable grounds to suspect that the client is unable to pay for the allowances for which it is seeking to bid;(d) they shall enter into a written agreement with their clients. Agreements entered into shall not impose any unfair conditions or restrictions on the client concerned. They shall provide for all the terms and conditions relating to the services offered including in particular payment and delivery of the allowances;(e) they may require their clients to make a deposit by way of advance payment for allowances;(f) they may not unduly limit the number of bids that a client might submit;(g) they may not prevent or restrict their clients from engaging the services of other entities eligible pursuant to Article 18(1)(b) to (e) and Article 18(2) to bid on their behalf in the auctions;(h) they shall pay due regard to the interests of their clients who request them to submit bids on their behalf in the auctions;(i) they shall treat clients fairly and without discrimination;(j) they shall maintain adequate internal systems and procedures to process requests from clients to act as agent in an auction and to be able to participate effectively in an auction in particular with regard to the submission of bids on behalf of their clients, collect payment and collateral from and transfer allowances to clients for whom they act;(k) they shall prevent the disclosure of confidential information from that part of their business responsible for receiving, preparing and submitting bids on behalf of their clients to that part of their business responsible for preparing and submitting bids on their own account or to that part of their business responsible for dealing on their own account on the secondary market;(l) they shall keep records of information obtained or created in their role as intermediaries handling bids on behalf of their clients in the auctions, for five years from the date of obtaining or creating the information concerned.The amount of the deposit referred to in point (e) shall be calculated on a just and reasonable basis.The method of calculating the deposit referred to in point (e) shall be set out in the agreements entered into pursuant to point (d).Any part of the deposit referred to in point (e) not used to satisfy payment for allowances shall be refunded to the payee within a reasonable period after the auction as stated in the agreements entered into pursuant to point (d).

3. Persons referred to in paragraph 1 shall apply the following conduct rules when bidding on their own account or on behalf of their clients:▼M8(a) they shall provide any information requested by any auction platform where they are admitted to bid to fulfil its functions under this Regulation;▼B(b) they shall act with integrity, reasonable skill, care and diligence.

4. The competent national authorities designated by the Member States where the persons referred to in paragraph 1 are established shall be responsible for authorising such persons to carry out the activities referred to in that paragraph and for monitoring and enforcing compliance with the conduct rules provided for in paragraphs 2 and 3 including the handling of any complaints made for non-compliance with such conduct rules.

5. The competent national authorities referred to in paragraph 4 shall only grant an authorisation to the persons referred to in paragraph 1 where the persons fulfil all of the following conditions:(a) they are of sufficiently good repute and sufficiently experienced as to ensure proper respect of the conduct rules provided for in paragraphs 2 and 3;(b) they have put in place the necessary processes and checks to manage conflicts of interest and serve the best interests of their clients;▼M8(c) they comply with the requirements of national legislation transposing Directive (EU) 2015/849;▼B(d) they comply with any other measures deemed necessary having regard to the nature of the bidding services being offered and the level of sophistication of the clients in question in terms of their investor or trading profile as well as any risk-based assessment of the likelihood of money laundering, terrorist financing or criminal activity.

6. The competent national authorities of the Member State where the persons referred to in paragraph 1 are authorised shall monitor and enforce the conditions listed in paragraph 5. The Member State shall ensure that:(a) its competent national authorities have at their disposal the necessary investigative powers and sanctions that are effective, proportionate and dissuasive;(b) a mechanism is established for the handling of complaints and the withdrawal of authorisations where the authorised persons are in breach of their obligations pursuant to such authorisation;(c) its competent national authorities may withdraw the authorisation granted under paragraph 5 where a person referred to in paragraph 1 has seriously and systematically infringed the provisions of paragraphs 2 and 3.

7. Clients of bidders referred to in paragraph 1 may direct any complaints that they may have with regard to compliance with the conduct rules provided for in paragraphs 2 and 3 to the competent authorities mentioned in paragraph 4 in accordance with the procedural rules laid down for the handling of such complaints in the Member State where the persons referred to in paragraph 1 are supervised.

8. Persons referred to in paragraph 1 that are admitted to bid at an auction platform pursuant to Articles 18, 19 and 20 shall be allowed, without further legal or administrative requirements of the Member States, to provide bidding services to clients referred to in point (a) of Article 19(3).

CHAPTER XVI — TRANSPARENCY AND CONFIDENTIALITY

Article 60, Publication #art_60

1. All legislation, guidance, instructions, forms, documents, announcements, including the auction calendar, any other non-confidential information pertinent to the auctions on a given auction platform, including the list of persons admitted to bid in the auctions, any decision, including any decision pursuant to Article 57, to impose a maximum bid-size and any other remedial measures necessary to mitigate an actual or potential discernible risk of money- laundering, terrorist financing, criminal activity or market abuse on that auction platform, shall be published on a dedicated up-to-date auctioning web-site maintained by the auction platform concerned.▼BInformation which is no longer relevant shall be archived. Such archives shall be accessible through the same auctioning web-site.

3. A list of the names, addresses, telephone and facsimile numbers, electronic mail addresses and websites of all persons admitted to bid on behalf of others in auctions conducted by any auction platform appointed pursuant to Article 26(1) or 30(1) shall be published on the website maintained by the auction platform concerned.

Article 61, Announcement and notification of the auction results #art_61

1. An auction platform shall announce the results of each auction it conducts including at least the following information:(a) the volume of the allowances auctioned;(b) the auction clearing price in euros;(c) the total volume of bids submitted;(d) the total number of bidders and the number of successful bidders;(e) in case of cancellation of an auction, the auctions to which the volume of allowances will be carried over;(f) the total revenue earned from the auction;(g) the distribution of the revenue between the Member States, in the case of auction platforms appointed pursuant to Article 26(1).

2. The auction platform shall announce the results of each auction as soon as is reasonably practicable. The information on the auction results pursuant to points (a) and (b) of paragraph 1 shall be announced no later than 5 minutes after the close of the bidding window, whereas the information on the auction results pursuant to points (c) to (g) of paragraph 1 shall be announced no later than 15 minutes after the close of the bidding window.

3. ►M8 At the same time as the auction platform announces pursuant to paragraph 2 the information listed in points (a) and (b) of paragraph 1, the auction platform shall notify each successful bidder bidding through its systems:** ◄ **(a) the total number of allowances to be allocated to that bidder;(b) which of its tied bids, if any, were randomly selected;(c) the payment due either in euros or in the currency of a Member State not member of the euro-zone, chosen by the bidder provided that the clearing system or settlement system is capable of handling the national currency in question;(d) the date by which the payment due must be paid in cleared funds into the auctioneer's nominated bank account.

4. Where the currency chosen by the bidder is not euros an auction platform shall notify a successful bidder bidding in auctions conducted by it of the exchange rate it has used to calculate the amount due in the currency chosen by the successful bidder.The exchange rate shall be the rate published on a recognised financial newswire service specified in the contract appointing the auction platform concerned, immediately following the close of the bidding window.

5. An auction platform shall notify the relevant clearing system and settlement system connected to it of the information notified to each successful bidder, pursuant to paragraph 3.

Article 62, Protection of confidential information #art_62

1. The following shall constitute confidential information:(a) the contents of a bid;(b) the contents of any instructions to bid even when no bid is submitted;(c) information which discloses, or from which can be deduced, the identity of the bidder in question and either of the following:(i) the number of allowances which a bidder wishes to acquire in an auction;(ii) the price which a bidder is willing to pay for those allowances;(d) information about, or derived from, one or more bids or instructions to bid which either separately or collectively would be likely to:(i) give an indication as to the demand for allowances prior to any auction;(ii) give an indication as to the auction clearing price prior to any auction;(e) information provided by persons in the framework of the establishment or maintenance of the relationship with bidders or in the framework of the monitoring of that relationship pursuant to Articles 19, 20, 21 and 54;▼M8 —————▼M8(g) business secrets provided by persons participating in a competitive procurement process to appoint an auction platform;▼B(h) information on the algorithm used for the random selection of tied bids, referred to in Article 7(2);(i) information on the methodology to define what constitutes an auction clearing price significantly under the prevailing secondary market price before and during an auction, referred to in Article 7(6).

2. Confidential information shall not be disclosed by any person who obtained that information, whether directly or indirectly, other than in accordance with paragraph 3.

3. Paragraph 2 shall not prevent the disclosure of confidential information which:(a) has already lawfully been made available to the public;(b) is made public with the written consent of a bidder, person admitted to bid, or person applying for admission to bid;(c) is required to be disclosed or to be publicly available by an obligation under Union law;(d) is made public pursuant to a court order;(e) ►M1 is disclosed or made public** ◄ ** for the purposes of any criminal, administrative, or judicial investigations or proceedings carried out in the Union;▼M8 —————▼B(g) is aggregated or redacted prior to its disclosure, so that it is unlikely that information relating to the following is discernable:(i) individual bids or instructions to bid;(ii) individual auctions;(iii) individual bidders, prospective bidders or persons applying for admission to bid;(iv) individual applications for admission to bid;(v) individual relationships with bidders;▼M8 —————▼B(i) is referred to in paragraph 1(g) provided that it is disclosed to persons working for Member States or the Commission involved in the competitive procurement process referred to in paragraph 1(g), who are themselves bound by an obligation of professional secrecy under their terms of employment;(j) is made public after the end of a period of 30 months starting from either of the following dates, subject to any subsisting professional secrecy obligations under Union law:(i) the date of the opening of the bidding window of the auction in which the confidential information is first disclosed with respect to confidential information in paragraph 1(a) to (d);(ii) the date of the termination of the relationship with a bidder with respect to confidential information in paragraph 1(e);▼M8 —————▼B(iv) the date of submission of the information in the competitive procurement process with respect to confidential information in paragraph 1(g).

4. The measures required to ensure that confidential information is not wrongfully disclosed and the consequences of any such wrongful disclosure by an auction platform, including any persons contracted to work for it, shall be set out in the contract appointing it.

5. Confidential information obtained by an auction platform, including any persons contracted to work for it, shall be used solely for the purpose of the performance of its obligations or the exercise of its functions with respect to the auctions.

6. ►M8 Paragraphs 1 to 5 shall not preclude the exchange of confidential information between an auction platform and:** ◄ **(a) the competent national authorities supervising an auction platform;(b) the competent national authorities responsible for investigating and prosecuting money laundering, terrorist financing, criminal activity or market abuse;(c) the Commission.Confidential information exchanged under this paragraph shall not be disclosed to other persons than those referred to in points (a), (b) and (c) contrary to paragraph 2.

7. Any person who works, or has worked for, an auction platform involved in the auctions, shall be bound by the obligation of professional secrecy and shall ensure that confidential information is protected pursuant to this Article.

Article 63, Language regime #art_63

1. Written information provided by an auction platform pursuant to Article 60(1) and (3) or under the contract appointing it, which is not published in the Official Journal of the European Union, shall be in a language customary in the sphere of international finance.

2. Any Member State may provide, at its own cost, for the translation of all information covered by paragraph 1 of an auction platform, into the official language(s) of that Member State.Where a Member State provides, at its own cost, for the translation of all information covered by paragraph 1 provided by the auction platform appointed pursuant to Article 26(1), any Member State having appointed an auction platform pursuant to Article 30(1) shall also provide, at its own cost, for the translation into the same language(s) of all information covered by paragraph 1 provided by the auction platform it has appointed pursuant to Article 30(1).

3. Applicants for admission to bid and persons admitted to bid may submit the following in the official language of the Union they have chosen under paragraph 4 provided that a Member State has decided to provide a translation in that language under paragraph 2:(a) their applications for admission to bid, including any supporting documents;(b) their bids, including any withdrawal or modifications thereof;(c) any queries relating to points (a) or (b).An auction platform may request a certified translation into a language customary in the sphere of international finance.

4. Applicants for admission to bid, persons admitted to bid and bidders participating in an auction, shall choose any official language of the Union in which they shall receive all notifications made pursuant to Articles 8(3), 20(10), 21(4) and 61(3).All other oral or written communication by any auction platform to applicants for admission to bid, persons admitted to bid or bidders participating in an auction, shall be made in the language chosen under the first subparagraph at no additional cost to the applicants, persons and bidders in question, provided that a Member State has decided to provide a translation in that language under paragraph 2.However, even where a Member State pursuant to paragraph 2 has decided to provide a translation in the language chosen under the first subparagraph of this paragraph, the applicant for admission to bid, the person admitted to bid or the bidder participating in an auction, may waive its right under the second subparagraph of this paragraph by giving prior written consent for the auction platform concerned to use only a language customary in the sphere of international finance.

5. Member States shall be responsible for the accuracy of any translation made pursuant to paragraph 2.Persons submitting a translation of a document referred to in paragraph 3 and any auction platform notifying a translated document under paragraph 4 shall be responsible for ensuring that it is an accurate translation of the original.

CHAPTER XVII — FINAL PROVISIONS

Article 64, Right of appeal #art_64

1. An auction platform appointed pursuant to Article 26(1) or 30(1) shall ensure that it has in place an extra-judicial mechanism to deal with complaints from applicants for admission to bid, bidders admitted to bid, or whose admission to bid has been refused, revoked or suspended.

2. Member States where a regulated market appointed as an auction platform pursuant to Article 26(1) or 30(1) of this Regulation or its market operator are supervised, shall ensure that any decisions made by the extra-judicial mechanism dealing with complaints referred to in paragraph 1 of this Article are properly reasoned and are subject to the right to apply to the courts referred to in Article 74(1) of Directive 2014/65/EU. That right shall be without prejudice to any rights of appealing directly to the courts or competent administrative bodies provided for in the national measures transposing Article 74(2) of Directive 2014/65/EU.

Article 65, Correction of errors #art_65

1. Any errors in any payment or allowance transfers made and collateral or deposit given or released under this Regulation shall be notified to the clearing system or settlement system as soon as it comes to the notice of any person.

2. The clearing system or settlement system shall take whatever measures necessary to rectify any errors in any payment or allowance transfers made and collateral or deposit given or released under this Regulation which come to their attention by whatever means.

3. Any person benefiting from an error under paragraph 1 which cannot be rectified under paragraph 2, due to the intervening rights of a third party purchaser in good faith, who knew of or ought to have known of the error and failed to notify it to the clearing system or settlement system, shall be liable to make good any damage caused.

Article 66, Entry into force #art_66

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union.

Provenance and validity dates, identifier, hash
as of2019-11-28 → this version applied
valid2019-11-28 → open publisher-asserted
typeREG Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a system for greenhouse gas emission allowances trading within the Union (Text with EEA relevance)
languageen
published2019-11-28
lex_ideu-eurlex:32010r1031:2019-11-28
record sha25672a7be25804106fa06608dfae3909e0c9490a3ec1f71e27005bea26a0fec6ea5
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index built2026-08-07T19:46:23Z · corpus 8d5e859
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