The B3 trust seal for the electricity market was created to provide greater transparency about counterparty risk in electricity purchase and sale trading contracts. The seal has its own assessment methodology that allows identifying the risk inherent to each agent in the free electricity market.
For the seal to be assigned to agents, two key elements are used: compliance with the obligations provided for in the B3 trust seal for the electricity market rule and the portfolio risk analysis considering the recommended exposure limits vs. the exposure limits used at the time.
How it works
Each measure provided for in the B3 trust seal for the electricity market rule corresponds to a score. A check of adherence to the rules is made and then points are awarded according to their compliance. When the total score is obtained, the agent is ranked in one of the B3 trust seal for the electricity market levels: Level 1, Level 2 and Level 3.
Furthermore, a risk analysis is carried out to check the potential loss of each agent's portfolio. As a result, agents who have adhered or not to the risk methodology adopted by B3 are disclosed.
Measures provided for in the Rule and their corresponding scores
|Line of action||Measures||Weight|
|Submission of Financial Statements||Submission of annual Financial Statements*||0|
|Submission of annual and half-yearly Financial Statements||+ 10|
|Submission of quarterly Financial Statements||+ 5 (cada uma)|
|Submission of contracts||Daily submission of contracts*||+ 10|
|Submission of contracts in real time||+ 20|
|Independent audit||Submission of audit report on annual Financial Statements||+ 5|
|Submission of independent audit report on annual and half-yearly Financial Statements||+ 10|
|Means of sending contracts||Sending contracts via electronic file (spreadsheet)||0|
|Sending via system integration (API)||+ 7|
|Sending contracts to B3 and CCEE registration||Discrepancy between all contracts sent to B3 and registered with the Electricity Trading Chamber (CCEE)||- 15|
|Administrative structure||Advisory board||+ 5|
|Board of directors||+ 5|
|Governance||Risk management policy||+ 3|
|Risk management area||+ 4|
|Internal audit||+ 4|
* Mandatory measures. Failure to comply with each mandatory measure results in subtracting 10 points from each agent's total score.
B3 electricity platform
The B3 electricity platform provides information that enhances transparency, price formation and risk management in the free electricity market.
B3 registers electricity derivative OTC contracts in the Forward, Swap and Option modalities. Find out how this hedging mechanism works against electricity price fluctuations.
To learn more, talk to us on +55 (11) 2565-6918 or by email at email@example.com