How to correctly link a Gas Sleeve Spread executed voice by a broker.
We have the following trades resultant from a voice traded Sleeve Spread between two customers using a Sleeve:
Trade 1: Cust1 Vs Sleeve 1
Trade 2: Sleeve 1 Vs Cust2
Trade 3: Cust2 Vs Sleeve 1
Trade 4: Sleeve 1 Vs Cust1
The question is how to link the legs of the trades.
We suggest that the trades should be linked in the following manner:
We have used the combined logic from the Sleeve trading example and Dirty Spark Spread example.
|Linked ID of Trade 4||Linked ID of Trade 2|
|Linked ID of Trade 1||Linked ID of trade 3|
|Trade 3:||Cust 2||Vs||Sleeve 1|
|Linked ID of Trade 2||Linked ID of Trade 4|
|Trade 4:||Sleeve 1||Vs||Cust 1|
|Linked ID of Trade 3||Linked ID of Trade 1|
The Agency’s interpretation of the table is the following:
|Trade No.||First MP||Counterparty||Reported Linked ID|
|By First MP||By Counterparty|
|Trade 1||Customer 1||Sleeve1||Trade 4||Trade 2|
|Trade 2||Sleeve1||Customer 2||Trade 1||Trade 3|
|Trade 3||Customer 2||Sleeve1||Trade 2||Trade 4|
|Trade 4||Sleeve1||Customer 1||Trade 2||Trade 1|
When a trade occurs across multiple products due to the nature of the product, e.g. a product which is a spread of two or more products falling under the scope of REMIT, a trade report for each product has to be reported and the different trades are to be linked to each other when they are executed simultaneously on the Organised Market Place. For example, Dirty Spark Spreads for a trade that involves electricity and gas: the two contracts are reported separately, with one leg for the electricity and one leg for the gas trade. The two legs, i.e. gas and electricity trades, need to be linked together via Data Field (32) Linked transaction ID.
Same applies to Physical Swaps for a trade that involves two gas or electricity trades: a geographical physical swap involves two trades, e.g. selling gas in a particular delivery point and buying it in another delivery point. Both trades have to be reported separately and linked together via Data field (32) Linked transaction ID if they are traded simultaneously.
The whole chain of trade reports and the Linked Transaction ID fields should look like the example (3.20) in Annex II of the TRUM.