The Peculiarities Of The Legal Regulation Of Activities Of Commodity Delivery Operators In The Gas Market

 
PIIS231243500022521-1-1
DOI10.18572/2410-4396-2020-3-91-96
Publication type Article
Status Published
Authors
Affiliation: Legislation and Comparative Law under the Government of the Russian Federation
Address: Russian Federation, Moscow
Journal nameEnergy law forum
EditionIssue 3
Pages91-96
Abstract

This article studies the peculiarities of the legal status of the gas transportation operator under exchange contracts organizing transportation and serving as a prototype of the new law institution of the commodity delivery operator. In order to balance interests of gas sellers, buyers, and consumers, commodity delivery conditions shall be met and commercial gas balancing in the exchange and over-the-counter markets shall be implemented to ensure the fulfillment of all delivery obligations. The article addresses the implementation of the institution of the commodity delivery operator in the gas exchange market, as well as the peculiarities of commercial gas balancing aimed at 100% fulfillment of exchange contracts and reduction of market players’ costs. The role of the commodity delivery operator organizing gas transportation, metering, and monitoring of gas deliveries is important for the implementation of commercial balancing. Effective, well-balanced reforms are essential for the growth and creation of a favorable investment climate needed to modernize the gas market.

Keywordsenergy law, legal support of the gas exchange market, commodity delivery operator, commercial balancing, supplied gas monitoring and metering
Received06.08.2020
Publication date04.09.2020
Number of characters17178
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1 Current tasks and objectives of energy law justly include the need for extensive research into problems of both general energy law and its specific institutions.
2 A.G. Lisitsin-Svetlanov, М.I. Kleandrov,
3 P.G. Lakhno, V.V. Romanova, L.I. Shevchenko,
4 R.N. Salieva, etc., have contributed greatly to the development of energy law [1].
5 Many aspects of the legal regulation of the gas exchange market are also worthy of further legal research [2]. A fundamental task in this respect is to balance interests of gas market players by legal regulation. In order to balance interests of gas sellers, buyers, and consumers, commodity delivery conditions shall be met and commercial gas balancing in the exchange and over-the-counter markets shall be implemented to ensure the fulfillment of all delivery obligations. As correctly pointed out by V.V. Romanova, the main objectives of energy law and order as a necessary component of public law and order include, among other things, “the legal regulation of the balance of interests between parties to private law relations in the energy sector. Therefore, energy law and order shall, first of all, enable energy companies supplying energy resources to make profit and enable different categories of buyers (businesses, non-profit organizations, natural persons) to purchase energy resources at an adequate price” [3]. At the same time, in order to balance interests of gas sellers, buyers, and consumers, commodity delivery conditions shall be met, and commercial gas balancing in the exchange and over-the-counter markets shall be implemented to ensure the fulfillment of all delivery obligations. In this regard, the development of the institution of commodity delivery operators seems of particular importance.
6 The legal status of parties to social relations in the energy sector is one of the fundamental elements of the system of energy legal regulation constituting energy law and order[4]. There are currently few legal studies on the peculiarities of the legal status of energy law subjects. The legal status of commodity delivery operators (hereinafter referred to as “CDOs”) responsible for gas supply monitoring and metering is also understudied. As rightfully stated by
7 V.V. Romanova, “accurate metering data are important for proper payments for supplied energy resources” [5].
8 The CDO legal status and operating procedures are established by Federal Law No. 7-ФЗ “On Clearing, Clearing Activities and the Central Counterparty” dated February 7, 2011 (hereinafter referred to as the “Clearing Law”), regulations of the Bank of Russia, internal regulations of exchanges and clearing houses, internal regulations and contracts of the CDO.
9 As per Article 2 Clauses 13 and 13.1 of the Clearing Law, a CDO is a company carrying out its activities under an internal regulation on service terms and conditions establishing the procedure for conducting, monitoring, and recording commodity deliveries under commitments arising from exchange sales contracts and admitted for clearing. CDOs shall be accredited by the Bank of Russia.
10 CDOs are accredited according to the Instruction of the Central Bank of the Russian Federation No. 194-И “On the Procedure and Terms of the Accreditation of Entities Acting as Commodity Delivery Operators by the Bank of Russia, Grounds and the Procedure for Accreditation Termination” dated December 17, 2018 (hereinafter referred to as “Instruction No. 194-И”). In order to be accredited by the Bank of Russia, a candidate shall be a legal entity incorporated as a business company, state or municipal unitary enterprise, and comply with the following requirements. It shall:
11 Have a list of commodities selected by the entity for which it intends to act as a CDO,
12 Have a valid contract (provisional contract) for information exchange with a clearing house when performing CDO functions, the rights and obligations under which are contingent on the candidate’s accreditation,
13 Have software and hardware necessary to conduct, monitor, and record commodity deliveries under commitments arising from onexchange supply contracts admitted for clearing in accordance with the clearing regulations of the clearing house the candidate has a valid contract (provisional contract) for information exchange with,
14 Approve such documents as CDO service terms and conditions, a confidentiality document, and a document regulating procedures ensuring the integrity and protection of the information the candidate will become aware of while performing its activities as a CDO,
15 Have an official website on the Internet and make the CDO service terms (including amendments thereto) and other documents publicly available 24/7 in accordance with Instruction No. 194-И. Moreover, the candidate shall undertake to inform the Bank of Russia on such significantevents as a change in the company name, address, restructuring, and other circumstances stipulated by the regulations of the Bank of Russia.
16 An accredited CDO has to meet all the Bank of Russia’s requirements, otherwise the regulatory authority may terminate accreditation (e.g., in case of the CDO’s repeated failure to follow instructions issued by the Bank of Russia within one year, failure to perform CDO functions, etc.).

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3. Romanova V.V. Energy Law Order: Current State and Tasks / V.V. Romanova. Moscow : Yurist Publishing House, 2016. P. 255.

4. Romanova V.V. Energy Law Order: Current State and Tasks / V.V. Romanova. Moscow : Yurist Publishing House, 2016. P. 255.

5. Romanova V.V. Introduction // Romanova V.V. Energy Markets: Problems and Challenges of Legal Regula- tion : Monograph / edited by V.V. Romanova. Moscow : Yurist Publishing House, 2018. P. 7.

6. Order of the Bank of Russia No. 5102-U “On the Case of Opening a Commodity Trading Account and a Commodity Clearing Account by the Commodity Delivery Operator, if the Property Used for the Performance and/or Enforcement of Obligations Admitted for Clearing is Recorded by the Commodity Delivery Operator on Grounds Other than a Property Storage Contract” dated March 26, 2019 // Bank of Russia Bulletin. 2019. July 3.

7. Saint Petersburg International Mercantile Exchange. URL: https://www.spimex.com (accessed on: 4/14/2020).

8. Commodity Delivery Operator of the Fuel and Energy Complex. URL: https://www.gmrgp.ru (accessed on: April 14, 2020).

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