Commission Delegated Regulation (EU) 2023/2830 of 17 October 2023 supplementing Directive 2003/87/EC of the European Parliament and of the Council by laying down rules on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances

• CELEX: Delegated Regulation (EU) 2023/2830
• Articles: 62

Article 1 Subject Matter

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

This Regulation shall apply to the allocation through auctions of allowances under Directive 2003/87/EC.

Article 3 Definitions

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

(1)

‘two-day spot contracts’ means contracts by which allowances are auctioned for delivery at an agreed date no later than the second trading day following the day of the auction;

(2)

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

(3)

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

(4)

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

(5)

‘investment firm’ means investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU;

(6)

‘credit institution’ means credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council  ( 15 ) ;

(7)

‘financial instrument’ means financial instrument as defined in Article 4(1), point (15), of Directive 2014/65/EU;

(8)

‘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;

(9)

‘parent undertaking’ means parent undertaking as defined in Article 2, point (9), of Directive 2013/34/EU of the European Parliament and of the Council  ( 16 ) ;

(10)

‘subsidiary undertaking’ means subsidiary undertaking as defined in Article 2, point (10), of Directive 2013/34/EU;

(11)

‘affiliate undertaking’ means affiliate undertaking as defined in Article 2, point (12), of Directive 2013/34/EU;

(12)

‘control’ means control as referred to in Article 3(2) and (3) of Council Regulation No 139/2004  ( 17 ) ;

(13)

‘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 and transfer of auction proceeds, 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;

(14)

‘money laundering’ means money laundering as defined in Article 1(3), (4) and (6) of Directive (EU) 2015/849 of the European Parliament and of the Council  ( 18 ) ;

(15)

‘terrorist financing’ means terrorist financing as defined in Article 1(5) and (6) of Directive (EU) 2015/849;

(16)

‘criminal activity’ means criminal activity as defined in Article 3, point (4), of Directive (EU) 2015/849;

(17)

‘auction platform’ means any public or private entity appointed to carry out the tasks referred to in Articles 27, 28, 30 and 31;

(18)

‘common auction platform’ means the auction platform appointed following a joint procurement procedure between the Commission and the Member States, as contracting authorities, pursuant to Article 26(1)

(19)

‘opt-out auction platform’ means the auction platform appointed by a Member State not participating in the joint action as provided in Article 26(1), as its own auction platform, pursuant to Article 29(1)

(20)

‘auctioneer’ means any public or private entity appointed to carry out the tasks referred to in Article 23;

(21)

‘nominated Union Registry account’ means an account in the Union Registry established by Delegated Regulation (EU) 2019/1122;

(22)

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

(23)

‘customer due diligence measures’ means the customer due diligence measures as referred to in Article 13 of Directive (EU) 2015/849 and the enhanced customer due diligence measures as set out in Articles 18, 18a and 20 of that Directive;

(24)

‘beneficial owner’ means beneficial owner as defined in Article 3, point (6), of Directive (EU) 2015/849;

(25)

‘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;

(26)

‘politically exposed person’ means politically exposed person as defined in Article 3, point (9), of Directive (EU) 2015/849;

(27)

‘market abuse’ means market abuse as defined in Article 1 of Regulation (EU) No 596/2014;

(28)

‘inside information’ means inside information as defined in Article 7 of Regulation (EU) No 596/2014;

(29)

‘insider dealing’ means insider dealing as defined in Article 8 of Regulation (EU) No 596/2014;

(30)

‘unlawful disclosure of inside information’ means unlawful disclosure of inside information as defined in Article 10 of Regulation (EU) No 596/2014;

(31)

‘market manipulation’ means market manipulation as defined in Article 12 of Regulation (EU) No 596/2014;

(32)

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

(33)

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

(34)

‘margining’ means the process by which collateral is 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, and which is 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;

(35)

‘settlement’ means payment by a successful bidder or its successor in title, or by 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 to a central counterparty or a settlement agent, and delivery of the allowances to the successful bidder or its successor in title, or to the central counterparty or the settlement agent;

(36)

‘central counterparty’ means an entity that interposes either directly between an auctioneer and a bidder or its successor in title, or between intermediaries representing them, and 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;

(37)

‘settlement system’ means any infrastructure, whether or not connected to the auction platform, that provides settlement services, which include clearing, netting, management of collateral, or any other services and which ultimately enable the payment of the sum due by a successful bidder or its successor in title to an auctioneer, and the delivery of allowances on behalf of an auctioneer to a successful bidder or its successor in title, where those services are 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;

(38)

‘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 for 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;

(39)

‘collateral’ means collateral security as defined in Article 2, point (m), of Directive 98/26/EC of the European Parliament and of the Council  ( 19 ) , including any allowances accepted as security by the clearing system or settlement system;

(40)

‘regulated market’ means regulated market as defined in Article 4(1), point (21), of Directive 2014/65/EU;

(41)

‘SMEs’ means operators, aircraft operators, shipping companies or regulated entities that are small and medium-sized enterprises within the meaning of Commission Recommendation 2003/361/EC  ( 20 ) ;

(42)

‘market operator’ means market operator as defined in Article 4(1), point (18), of Directive 2014/65/EU;

(43)

‘Member State of establishment’ means any of the following:

(a)

in the case of persons referred to in Article 6(3), second subparagraph of this Regulation, the Member State where the person has its place of residence or permanent address;

(b)

in the case of persons referred to in Article 18(1), point (b), and Article 18(2), and of business groupings referred to in Article 18(1), point (d), of this Regulation, home Member State as defined in Article 4(1), point (55)(a), of Directive 2014/65/EU;

(c)

in the case of persons referred to in Article 18(1), point (c), of this Regulation, home Member State as defined in Article 4(1), point (43), of Regulation (EU) No 575/2013;

(d)

in the case of a regulated market referred to in Article 33(4), (5) and (6) of this Regulation, home Member State as defined in Article 4(1), point (55)(b), of Directive 2014/65/EU;

(44)

‘exit strategy’ means one or more documents that are determined in accordance with the contracts appointing the auction platform concerned and that set 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 assets provided pursuant to points (a) and (b).

Article 4 Auctioned products

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 two-day spot contracts.

Article 5 Auction format

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

Article 6 Submission and withdrawal of bids

1.   The minimum volume bid for shall be one lot of 500 allowances.

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;

(c)

the volume bid as a number of allowances in integral multiples of lots referred to in paragraph 1;

(d)

the price bid in euro for each allowance, rounded to two decimal points.

3.   Each bid may only be submitted, modified or withdrawn by a given deadline before the close of the bidding window. The auction platform concerned shall set and publish this deadline on its 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), point (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 considers 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 and activity within the meaning of Article 4(1), point (2), of Directive 2014/65/EU.

Article 7 Auction clearing price and resolution of tied bids

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

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, those bids shall be sorted through a random selection according to an algorithm determined by the auction platform before the auction.

2.   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 immediately before and during 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, after having consulted the relevant contracting authorities referred to in Article 26(1) or Article 29(4), and notifying the competent national authorities referred to in Article 47.

Between two bidding windows on the same auction platform, the auction platform concerned may modify the methodology referred to in the first subparagraph. It shall consult the relevant contracting authorities referred to in Article 26(1) or Article 29(4) and the competent national authorities referred to in Article 47 on the planned modifications without delay.

The auction platform concerned shall take the utmost account of the opinion of the relevant contracting authority on the methodology referred to in this paragraph, where such an opinion has been provided.

8.   Paragraphs 6 and 7 shall not apply to the auctioning of allowances referred to in Article 13 for a period of 2 months starting from the first auction of those allowances.

The auction platform may extend the period referred to in the first subparagraph by 2 months, after having consulted the relevant contracting authorities referred to in Article 26(1) and notifying the competent national authorities referred to in Article 47, provided that such extension is necessary to ensure that a sufficiently liquid secondary market is in place for the application of paragraph 6.

The auction platform concerned shall take the utmost account of the opinion of the relevant contracting authorities on the extension referred to in this paragraph, where such an opinion has been provided.

9.   Where an auction of allowances referred to in Article 10 or 13 is cancelled, the volume of allowances shall be distributed evenly over the next four auctions scheduled on the same auction platform.

Where the volume of allowances from cancelled auctions referred to in the first subparagraph cannot be distributed evenly as referred to in that subparagraph in accordance with the rules on minimum volume bid set out in Article 6(1), the Member State concerned shall auction those allowances over fewer than four auctions.

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.

10.   Where an auction of allowances covered by Article 11 is cancelled, the volume of allowances shall be distributed evenly over the next two auctions scheduled on the same auction platform.

Where the volume of allowances from cancelled auctions referred to in the first subparagraph cannot be distributed evenly as referred to in that subparagraph in accordance with the rules on minimum volume bid set in Article 6(1), the Member State concerned shall auction those allowances in the next scheduled auction.

From 1 January 2025, where an auction including allowances covered by Article 11 is cancelled, paragraph 9 shall apply.

Article 8 Timing, frequency and distribution of the volume of allowances

1.   An auction platform shall conduct auctions separately through its own regularly recurring bidding window.

The bidding windows for auctions of allowances referred to in Article 13 conducted by the common auction platform shall be separate from the bidding windows for auctions of allowances referred to in Articles 10 and 11.

The bidding window shall be opened and closed on the same trading day and shall be kept open for no less than two hours. There shall be at least a two-hour delay between two consecutive bidding windows. The bidding windows of any two or more auction platforms shall not overlap.

The bidding windows for auctions of allowances referred to in Articles 10, 11 and 13 shall not overlap. From 1 January 2025, the allowances referred to in Articles 10 and 11 shall be auctioned in the same 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 might affect the proper conduct of the auctions. 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 having consulted 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 on the change, where such an opinion is delivered.

4.   The common auction platform shall conduct auctions of allowances referred to in Articles 10 and 13 at least on a weekly basis. The common auction platform shall conduct auctions of allowances referred to in Article 11 at least every two months. From 1 January 2025, provisions of this paragraph applying to allowances referred to in Article 10 shall also apply to allowances referred to in Article 11.

By way of derogation from the first subparagraph, the common auction platform may conduct auctions of allowances referred to in Article 13 at other frequencies in the first six auctions, provided that this is necessary to improve the participation in the auctions and ensure the smooth operation of the auction process.

Where the common auction platform conducts auctions in one or two days a week, no other auction platform shall conduct an auction on those days.

Where the common auction platform conducts auctions on more than two days a week, it shall choose two days on which no other auctions may take place. It shall publish those days no later than at the publication of the auction calendar as referred to in Article 12(2).

5.   The volume of allowances referred to in Articles 10 and 11 to be auctioned on a common auction platform shall in principle be distributed evenly over the auctions held in a given calendar year.

The volume of allowances referred to in Article 13 to be auctioned on a common auction platform shall in principle be distributed evenly over the auctions held in a given calendar year, except for the additional volumes to be auctioned in accordance with Article 30d, point (2), of Directive 2003/87/EC, which shall in principle be distributed evenly in the period up to 31 May 2028.

Where the annual volume of allowances of a Member State cannot be distributed evenly over the auctions in a given calendar year in accordance with the rules for minimum volume bid set out in Article 6(1), the relevant auction platform shall distribute that volume over fewer auctions, ensuring that the volume is auctioned, in principle, at least every quarter.

Article 9 Circumstances preventing the conduct of auctions

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 in accordance with Article 7(9).

Article 10 Annual volumes of auctioned allowances in respect of maritime transport activities and stationary installations

1.   The volume of allowances in respect of maritime transport activities referred to in Article 3ga of Directive 2003/87/EC and in respect of stationary installations falling within the scope of Chapter III of that Directive to be auctioned in any given calendar year shall be the volume of allowances established in accordance with Article 10(1) and 10(1a) of that Directive.

2.   The volume of allowances to be auctioned by each Member State in any given calendar year shall be based on the volume of allowances established pursuant to paragraph 1 of this Article and the share of allowances of that Member State determined pursuant to Article 3ga(3) and Article 10(2) of Directive 2003/87/EC.

3.   The volume of allowances referred to in paragraphs 1 and 2 of this Article shall take into account changes pursuant to any of the following provisions:

(a)

Article 3gb, Article 10a(5a), Articles 10c and 10ca, Article 10d(4), Article 10e(3), Article 12(3-e) and (4), and Articles 24, 27, 27a and 29a of Directive 2003/87/EC;

(b)

Article 1 of Decision (EU) 2015/1814;

(c)

Article 6 of Regulation (EU) 2018/842 of the European Parliament and of the Council  ( 21 ) .

4.   Any change to the volume of allowances to be auctioned in a given calendar year other than the changes referred to in Article 14 shall be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

Any volume of allowances that cannot 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 distribution of allowances pursuant to Article 10a(8) of Directive 2003/87/EC shall be determined taking into account the following:

(a)

the volume of allowances and the date when they are made available to the Innovation Fund pursuant to Article 9, fourth paragraph, Article 10a(1), (1a) and (5b), Article 10a(8), first, third and fourth subparagraphs, and Article 10e(4) of Directive 2003/87/EC;

(b)

the frontloading of allowances for the Innovation Fund pursuant to Article 10a(8), second subparagraph, of Directive 2003/87/EC;

(c)

the volume of allowances to be auctioned for the Recovery and Resilience Facility pursuant to Article 10e(2) until 31 August 2026.

Without prejudice to the first subparagraph, the annual volume of allowances to be auctioned pursuant to Article 10a(8) of Directive 2003/87/EC shall be at least 40 000 000 allowances. That volume shall be reflected in the auction calendar referred to in Article 12 of this Regulation.

6.   The initial annual volume of allowances to be auctioned pursuant to Article 10e(2) and (3) of Directive 2003/87/EC shall be as follows:

(a)

for 2024: 86 685 000 allowances;

(b)

for 2025: 86 685 000 allowances;

(c)

for 2026: 58 000 000 allowances.

The annual volume of allowances that need to be auctioned to reach the revenue referred to in Article 10e(2) and (3) of Directive 2003/87/EC may be adjusted to ensure that the objectives set out in Article 10e of that Directive are met. For the purposes of that adjustment, the revenue already obtained, the average auction clearing price for the six preceding calendar months, and the time remaining until 31 August 2026 shall be taken into account and the auction calendars shall be adjusted accordingly in accordance with Article 14(1), point (o) of this Regulation.

If the auction revenue referred to in Article 10e(2) and (3) of Directive 2003/87/EC is reached before the date of the last auction scheduled for the Recovery and Resilience Facility, the subsequent auctions of allowances for that Facility shall be immediately suspended in line with the relevant provisions for suspension of such auctions set out in Delegated Regulation (EU) 2019/1122. The relevant auction calendars shall be adjusted accordingly in accordance with Article 14(1), point (e) of this Regulation.

Article 11 Annual volumes of auctioned allowances in respect of aviation

1.   The volume of allowances in respect of aviation activities referred to in Article 3b of Directive 2003/87/EC to be auctioned each calendar year shall be the volume of allowances established in accordance with Articles 3c and 3d of that Directive.

2.   The volume of allowances to be auctioned by each Member State in any given calendar year shall be based on the volume of allowances established pursuant to paragraph 1 of this Article and the share of allowances of that Member State determined pursuant to Article 3d(3) of Directive 2003/87/EC.

3.   Any change to the volume of allowances to be auctioned in a given calendar year other than the changes referred to in Article 14 shall be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

4.   Any volume of allowances that cannot 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.

Article 12 Auction calendar for individual auctions of allowances referred to in Articles 10 and 11 auctioned by the common auction platform

1.   The common auction platform shall, after consulting the Commission, determine the auction calendars, including the bidding windows, the individual auction volumes, the auction dates, the auctioned product and the payment and delivery dates for the allowances referred to in Articles 10 and 11 to be auctioned in individual auctions each calendar year.

2.   The common auction platform shall publish the auction calendar for a given calendar year by 31 July of the previous calendar year with regard to allowances referred to in Articles 10 and Article 11 of this Regulation, or as soon as practicable thereafter, provided that the Commission has instructed the central administrator of the Union Registry to enter the auction table corresponding to the auction calendar into the Union Registry, in accordance with Delegated Regulation (EU) 2019/1122.

3.   The auction calendars for allowances referred to in Articles 10 and 11 shall be determined and published separately. From 1 January 2025, the common auction platform shall determine and publish joint auction calendars for allowances referred in Articles 10 and 11 in accordance with Delegated Regulation (EU) 2019/1122.

Article 13 Annual volumes and calendars for individual auctions of allowances in respect of buildings, road transport and additional sectors

1.   The volume of allowances referred to in Article 30a of Directive 2003/87/EC to be auctioned in any given calendar year from 2027 shall be the volume of allowances established in accordance with Articles 30c and 30d of that Directive.

2.   The volume of allowances to be auctioned by each Member State in any given calendar year shall be based on the volume of allowances established pursuant to paragraph 1 of this Article and the share of allowances of that Member State determined pursuant to Article 30d(5) of Directive 2003/87/EC.

3.   The volume of allowances referred to in paragraphs 1 and 2 of this Article shall take into account changes pursuant to Article 30e(3) or Articles 30h and 30j of Directive 2003/87/EC or pursuant to Article 1a of Decision (EU) 2015/1814.

4.   The common auction platform shall, after having consulted the Commission, determine the auction calendars, including the bidding windows, the individual auction volumes, the auction dates, the auctioned product, and the payment and delivery dates for the allowances to be auctioned each calendar year in individual auctions in accordance with paragraph 2 of this Article. It shall publish the auction calendar for a calendar year by 31 July of the preceding year, or as soon as practicable thereafter, provided that the Commission has instructed the central administrator of the Union Registry to enter the auction table corresponding to the auction calendar into the Union Registry in accordance with Delegated Regulation (EU) 2019/1122.

5.   The annual auction volumes of allowances referred to in Article 30d(3) and (4) of Directive 2003/87/EC shall be auctioned together with the respective annual volumes of allowances referred to in paragraph 1 of this Article before 31 August each year. The initial annual volume of allowances to be auctioned in 2027 pursuant to Article 30d(3) and (4) of Directive 2003/87/EC shall be 350 000 000 allowances.

6.   Where 75 % of the maximum annual amount of revenue referred to in Article 30d(4) of Directive 2003/87/EC is not generated by 30 June of any given year, the initial annual volume of allowances to be auctioned for the Social Climate Fund shall be increased for the period from September to December of that year.

If the maximum annual amount of revenue is reached earlier than initially foreseen in the auction calendar, the subsequent auctions of allowances for the Social Climate Fund shall be immediately suspended in line with the relevant provisions for suspension of such auctions set out in Delegated Regulation (EU) 2019/1122.

In both cases, the auction calendar shall be adjusted accordingly without undue delay in accordance with Article 14(1), to either increase the number of allowances auctioned for the Social Climate Fund for the period from September to December or to auction any excess volume on behalf of the Member States.

Article 14 Adjustments of auction calendars and of the volume of allowances to be auctioned

1.   The determinations and publications of the annual volumes to be auctioned and of the bidding windows, the distribution of allowances, dates, auctioned product, payment and delivery dates in connection with individual auctions pursuant to Articles 10, 11 and 13 and Article 31(3) 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 31(4);

(b)

the suspension of an opt-out platform that is provided for in Delegated Regulation (EU) 2019/1122;

(c)

a decision by a Member State pursuant to Article 29(7);

(d)

a settlement failure referred to in Article 36(5);

(e)

the suspension of a process provided for in Delegated Regulation (EU) 2019/1122 that impacts the auction calendars;

(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 and Article 10ca of that Directive;

(g)

a unilateral inclusion of additional activities, greenhouse gases or sectors pursuant to Article 24 or Article 30j of Directive 2003/87/EC;

(h)

a measure adopted pursuant to Article 29a or Article 30h of Directive 2003/87/EC;

(i)

the entry into force of amendments to this Regulation or to Directive 2003/87/EC;

(j)

withholding of allowances from the auctions pursuant to Article 22(4);

(k)

the necessity for an auction platform to avoid conducting an auction in breach of provisions laid down in this Regulation or in Directive 2003/87/EC;

(l)

adjustments necessary pursuant to Articles 1 and 1a of Decision (EU) 2015/1814;

(m)

a cancellation of allowances pursuant to Article 12(4) of Directive 2003/87/EC;

(n)

adjustments necessary pursuant to Article 10a(9) of Directive 2003/87/EC;

(o)

adjustments necessary pursuant to Article 10e of Directive 2003/87/EC;

(p)

adjustments necessary pursuant to Article 30d or Article 30e(3) of Directive 2003/87/EC.

2.   The auction platforms concerned shall publish the adjusted auction calendars 4 weeks prior to their date of application, or as soon as practicable thereafter. This requirement shall not apply to adjustments referred to in paragraph 1, points (a) to (e).

Article 15 Persons who may submit bids directly in an auction

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

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

2.   Admission to the auctions shall not depend on membership or a participation in the secondary market organised by the auction platform or any other trading place operated by the auction platform or by a third party.

3.   An auction platform shall ensure that its auctions can be accessed remotely by means of a web-based electronic interface accessible in a secure and reliable manner. It may also offer bidders the option of accessing its auctions through dedicated connections to the electronic interface.

4.   In the event that the main means of access becomes inaccessible, an auction platform may offer on its own initiative or at the request of Member States, one or more alternative means of access to its auctions, 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

An auction platform shall offer a practical web-based training module on the conduct of its auction process, 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 and electronic mail at least during the working hours of each trading day.

Article 18 Persons eligible to apply for admission to bid

1.   The following persons shall be eligible to apply for admission to bid directly in auctions:

(a)

an operator, an aircraft operator, a shipping company or a regulated entity having an operator account in the Union Registry which is opened in accordance with Delegated Regulation (EU) 2019/1122, 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, the aircraft operator, the shipping company or the regulated entity;

(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  ( 22 ) bidding on their own account or on behalf of their clients;

(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).

Operators, aircraft operators and shipping companies may only participate in the auctions of allowances referred to in Article 10 and 11, whereas regulated entities may participate only in the auctions referred to in Article 13, including when they use the services of entities referred to in paragraph 1, points (b) to (e), to bid on their behalf.

2.   By way of derogation from paragraph 1, persons covered by the exemption in Article 2(1), point (j), of Directive 2014/65/EU and authorised pursuant to Article 50 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 such clients.

3.   Where the persons referred to in paragraph 1, points (b) and (c), and paragraph 2 bid on behalf of their clients, they shall ensure that all the following conditions are fulfilled:

(a)

their clients are eligible persons to apply for admission to bid directly pursuant to paragraphs 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 submission of bids, collection of payment and transfer of allowances;

(ii)

prevent the disclosure of confidential information from the part of their business that is responsible for receiving, preparing and submitting bids on behalf of their clients to the part of their business that is responsible for preparing and submitting bids on their own account;

(iii)

ensure that their clients who are themselves bidding on behalf of their own clients in the auctions comply with the requirements set out in Article 19(2) and in this paragraph and that they require the same of their clients. Where there are further clients down the chain that are themselves bidding on behalf of their own clients, the directly preceding client shall require compliance with these requirements from the following client down the chain.

The auction platform concerned shall be able to rely on 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 this paragraph.

Persons referred to in the first subparagraph of this paragraph shall be able to demonstrate to the auction platform, upon its request pursuant to Article 20(5), point (d), that the conditions set out in the first subparagraph of this paragraph, points (a) and (b), are fulfilled.

4.   The following persons shall not be eligible to apply for admission to bid directly in auctions nor shall 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 act with respect to the auctions in question as:

(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 referred to in points (a) and (b);

(d)

persons working for persons referred to in points (a) and (b).

Article 19 Requirements for admission to bid

1.   Members of or participants in the secondary market organised by an auction platform that are persons referred to in Article 18(1) or (2) shall be admitted to bid directly in the auctions conducted by the auction platform concerned without any further admission requirements, provided that all the following conditions are fulfilled:

(a)

the requirements for admission of the member or participant to trade allowances on the secondary market organised by the auction platform are no less stringent than those set out in paragraph 2;

(b)

the auction platform receives any additional information necessary to verify the fulfilment of any requirements referred to in paragraph 2 that have not been previously verified.

2.   Persons who are not members of or participants in the secondary market organised by an auction platform, and who are eligible persons pursuant to Article 18(1) or (2) shall be admitted to bid directly in the auctions conducted by an auction platform provided that they:

(a)

are established in the Union, or are an operator, an aircraft operator, a shipping company or a regulated entity;

(b)

hold a nominated Union Registry account;

(c)

hold a nominated bank account;

(d)

appoint at least one bidder’s representative as referred to in Article 6(3), second subparagraph;

(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 48;

(h)

fulfil the requirements set out in Article 40(1).

Article 20 Submission and processing of applications for admission to bid

1.   Before submitting their first bid directly through any auction platform, persons referred to in Article 18(1) or (2) shall apply to the auction platform concerned for admission to bid.

By way of derogation from the first subparagraph, members of or participants in the secondary market organised by the auction platform concerned who fulfil the requirements set out in Article 19(1) shall be admitted to bid without applying to the auction platform concerned for admission to bid.

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 access to it through the internet, shall be provided and maintained by the auction platform concerned.

3.   An application for admission to bid shall be accompanied by duly certified copies of all supporting documents required by the auction platform to show that the applicant satisfies the requirements set out in Article 18(3) and in Article 19(2). The auction platform may accept copies of documents that are not duly certified if it can reasonably assume that they are true copies of the originals. An application for admission to bid shall at least include the elements listed in Annex I.

4.   An application for admission to bid, including any supporting documents, shall be made available, upon request, for inspection by the competent national law enforcement authorities of a Member State conducting an investigation referred to in Article 53(3), point (e), and any competent Union bodies involved in investigations conducted on a cross-border basis.

5.   An auction platform may refuse to grant 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 provide oral explanations following an invitation made by the auction platform to interview any representative of the applicant;

(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 the applicant, the clients of an applicant or, where applicable, the clients of their clients as provided for in Article 18(3);

(e)

to comply with requests made by the auction platform for any information required to check compliance with the requirements set out in Article 19(2).

6.   An application for admission to bid shall be deemed to be withdrawn if the applicant fails to submit information requested by an auction platform within a reasonable period of at least five trading days specified in the request for information made pursuant to paragraph 5, point (a), (d) or (e), or fails to cooperate in an interview or an investigation or verification referred to in paragraph 5, points (b) and (c).

7.   An applicant shall not provide an auction platform with false or misleading information. An applicant shall notify the auction platform concerned fully, honestly 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.

8.   An auction platform 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 bid in its auctions for a period not exceeding the term of its appointment, including any extension or renewal of that appointment;

(b)

grant conditional admission to bid in its auctions for a period not exceeding the term of its appointment, subject to fulfilment of certain specified conditions by a given date, which it shall duly verify;

(c)

refuse to grant admission to bid in its auctions.

Article 21 Refusal, revocation or suspension of an admission to bid

1.   An auction platform shall refuse to grant admission to bid in its auctions, or revoke or suspend any admission to bid already granted to any person who:

(a)

is not eligible to apply for admission to bid under Article 18(1) or (2);

(b)

does not meet the requirements set out in Articles 18 and 19, and, where applicable, Article 20; or

(c)

is wilfully or repeatedly in breach of this Regulation, the terms and conditions of the admission to bid in its auctions or any other related instructions or agreements.

2.   An auction platform shall refuse to grant admission to bid in its auctions, or 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 case of suspicions referred to in the first subparagraph, 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 46(2) of this Regulation.

3.   An auction platform may refuse to grant admission to bid in its auctions, or revoke or suspend any admission to bid already granted, to any person:

(a)

who is negligently in breach of this Regulation, of the terms and conditions of the admission to bid in its auctions or of 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; or

(c)

who is referred to in Article 18(1), point (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 to bid, or the revocation or suspension of the admission to bid, and be given a reasonable period, specified in the decision of refusal, revocation or suspension, to respond in writing. After considering the person’s written response, the auction platform concerned shall, if warranted:

(a)

grant or reinstate admission to bid with effect from a given date;

(b)

grant conditional admission to bid or conditional reinstatement of the admission to bid subject to fulfilment of certain specified conditions by a given date, which it shall duly verify; or

(c)

confirm the refusal to grant admission to bid, or the revocation or suspension of the admission to bid with effect from a given date.

The auction platform shall notify the person in question of its decision under the first subparagraph, points (a), (b) and (c).

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 or any other related instructions or agreements;

(d)

does not compromise their obligations regarding the protection of confidential information set out in Article 18(3), point (b)(ii), which shall remain in force for 20 years following their removal from the auctions.

The refusal, revocation and suspension 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.

Article 22 Appointment of the auctioneer

1.   Each Member State shall appoint an auctioneer. No Member State shall auction allowances without appointing an auctioneer. The same auctioneer may be appointed by more than one Member State.

2.   In good time prior to the start of the auctions, the auctioneer shall be appointed and it shall conclude and implement the necessary arrangements with the auction platform appointed or to be appointed, including any clearing system and settlement system connected to it, upon mutually agreed terms and conditions.

3.   A person working or acting for the Member State 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 the auctioneer, in addition to the measures provided for in Article 18(8) and Article 19(10) of Regulation (EU) No 596/2014.

4.   The allowances to be auctioned on behalf of a Member State shall be withheld from the auctions where that Member State has not appointed an auctioneer or where the arrangements referred to in paragraph 2 have not been concluded or have not entered in force.

5.   In a timely manner after the appointment of its auctioneer, Member States shall notify the identity of its auctioneer and its contact details to the Commission which shall publish them on its website.

Article 23 The auctioneer’s tasks

The auctioneer shall carry out the following tasks:

(a)

auctioning of the volume of allowances to be auctioned by each Member State appointing it or for any fund or facility which is to be a recipient of the auction proceeds pursuant to Union law;

(b)

receipt of the auction proceeds due to each Member State appointing it or to any fund or facility referred to under point (a);

(c)

disbursement of the auction proceeds due to each Member State appointing it or to any fund or facility referred to under point (a).

Article 24 Allowances to be auctioned for the Innovation Fund, the Modernisation Fund, the Recovery and Resilience Facility and the Social Climate Fund

1.   The European Investment Bank (EIB) shall be the auctioneer for the allowances to be auctioned from 2021 pursuant to Article 10a(8) and (9), Article 10d and Article 10e of Directive 2003/87/EC on the common auction platform. Article 22(2), (3) and (4), Articles 23, 35 and 36 and Article 43(1) of this Regulation shall apply mutatis mutandis to the EIB.

2.   The EIB shall ensure that the auction proceeds from the allowances pursuant to Article 10a(8) and Article 10e 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. The EIB may deduct, prior to disbursement, any additional fees for holding and disbursing the auction proceeds, in accordance with the agreements concluded with the Commission pursuant to Article 20(3) of Commission Delegated Regulation (EU) 2019/856  ( 23 ) and Article 10e of Directive 2003/87/EC.

3.   The Commission shall be the auctioneer for the allowances to be auctioned pursuant to Article 10a(8b) and Article 30d(3) and (4) of Directive 2003/87/EC on the common auction platform. Article 22(2), (3) and (4), Articles 23, 35 and 36 and Article 43(1) of this Regulation shall apply mutatis mutandis to the Commission.

4.   The annual auction volumes of allowances referred to in paragraph 1 of this Article and in Article 10a(8b) of Directive 2003/87/EC shall be auctioned together with the respective annual volumes of allowances referred to in Article 10 of this Regulation in the auctions conducted by the common auction platform and shall be evenly distributed in accordance with Article 8(4), first subparagraph, of this Regulation.

Article 25 Procedure for cancellation of allowances

1.   A Member State that intends to cancel allowances from its total volume 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 II to this Regulation.

The Member State concerned shall notify to the Commission at the latest by 31 May of a given year the exact number of allowances to be cancelled in the period between 1 September and 31 December of that year. If the total volume of allowances to be cancelled in that period exceeds 5 million allowances, that volume shall be spread over the period between 1 September of that year and 31 August of the following year. The Member State concerned shall make its first notification under this subparagraph at the latest two years after the notification under subparagraph one.

2.   A Member State that does not intend to cancel allowances 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 reasons for not cancelling such allowances within its reporting pursuant to Article 21 of that Directive.

3.   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 as established pursuant to Article 10 of this Regulation after any adjustment made pursuant to Decision (EU) 2015/1814 during the periods referred to in paragraph 1, second subparagraph.

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

Article 26 Appointment of a common auction platform

1.   Member States shall appoint a common auction platform following a joint procurement procedure between the Commission and the Member States, as contracting authorities, participating in the joint action pursuant to this Article.

2.   The joint procurement procedure referred to in paragraph 1 shall be conducted pursuant to Article 165(2) of Regulation (EU, Euratom) 2018/1046.

3.   The period of appointment of a common auction platform shall be no longer than 5 years. Where the conditions set out in Article 172(3) of Regulation (EU, Euratom) 2018/1046 are fulfilled, the Member States and the Commission may extend that period to 7 years. During the period of appointment, 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.

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

5.   A Member State that enters the joint action pursuant to this Article after the entry into force of the joint procurement agreement between the Commission and the Member States already participating in that action shall accept the terms and conditions of that agreement as well as any decisions already adopted under it.

A Member State that decides pursuant to Article 29(4) not to participate in the joint action pursuant to this Article but to appoint its own auction platform may be given observer status under terms and conditions agreed in the joint procurement agreement between the Member States participating in the joint action and the Commission, subject to any applicable Union public procurement rules.

Article 27 Services provided to the Member States by the common auction platform

1.   The common auction platform 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 web-based electronic interfaces and websites;

(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 52;

(e)

providing, or ensuring 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 35 and 36;

(ii)

delivering the auctioned allowances to successful bidders or their successors in title, pursuant to Articles 37, 38 and 39;

(iii)

managing collateral, including any margining, provided by the auctioneer or bidders, pursuant to Articles 40 and 41;

(f)

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 Articles 45 to 50 and Article 55(1);

(g)

reporting pursuant to Article 34.

2.   At least 20 trading days prior to the opening of the first bidding window run by it, the common auction platform, shall be connected to at least one clearing system or settlement system.

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

Article 28 Services provided to the Commission by the common auction platform

The common auction platform shall provide the Commission with technical support services with respect to the Commission’s work relating to the following:

(a)

coordination of the auction calendar with opt-out auction platforms listed in Annex III;

(b)

information relating to the conduct of the auctions pursuant to Article 44;

(c)

reports pursuant to Article 10(4), third subparagraph, and Article 10(5) of Directive 2003/87/EC;

(d)

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;

(e)

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.

Article 29 Appointment of opt-out auction platforms

1.   A Member State not participating in the joint action as provided in Article 26(1) may appoint its own opt-out auction platform for the auctioning of its volume of allowances referred to in Articles 10 and 11.

2.   An opt-out auction platform may be the same auction platform as the common auction platform or a different auction platform.

3.   A Member State that decides to appoint an opt-out auction platform shall inform the Commission thereof by the last day of the third month after the date of entry into force of Regulation (EU) No 1031/2010.

4.   An opt-out auction platform shall be selected, based on a selection procedure that is 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.

The period of appointment of an opt-out auction platform referred to in paragraph 1 shall be no longer than 3 years renewable for no more than a further period of 2 years.

The appointment of an opt-out auction platform shall not be effective before the entry into force of the listing of the opt-out auction platform concerned in Annex III, as provided for in paragraph 6.

5.   A Member State that decides to appoint an opt-out auction platform shall provide the Commission with a complete notification containing all of the following:

(a)

the identity of the auction platform it proposes to appoint;

(b)

the detailed operative rules that are to govern the auction process to be conducted by the auction platform it proposes to appoint, including the contractual provisions concerning the appointment of the auction platform and any clearing system and settlement system connected to the proposed auction platform, stipulating the terms and conditions governing the structure and level of fees, collateral management, payment and delivery;

(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 common auction platform, as well as any other auction calendars proposed by other Member States having appointed an opt-out auction platform;

(d)

the detailed rules and conditions on surveying and supervising the auctions to which its proposed auction platform shall be subject pursuant to Article 33(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(3) and Article 32 regarding the appointment of the auctioneer.

6.   Opt-out auction platforms appointed under paragraph 1 of this Article, their period of appointment, the Member States appointing them and any applicable conditions or obligations shall be listed in Annex III if the relevant requirements of this Regulation and the objectives of Article 10(4) of Directive 2003/87/EC are satisfied. The Commission shall act solely based on those requirements and objectives and shall have full regard to any information submitted by the Member State concerned.

In case a Member State having appointed an opt-out auction platform referred to in paragraph 1 decides to reappoint the same auction platform under the same conditions and obligations as per the listing provided for in the first subparagraph, that listing shall continue to be valid where that Member State and the Commission confirm that the relevant 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 provide a notification containing the information referred to in paragraph 5 to the Commission and inform the other Member States of the reappointment. 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 that chooses to appoint an opt-out auction platform shall use the common auction platforms to auction its share of allowances that would have otherwise been auctioned on the opt-out auction platform to be appointed in the period until the expiry of 3 months after the entry into force of the eventual listing provided for in the first subparagraph.

A Member State that chooses to appoint an opt-out 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 common auction platform as provided in the third subparagraph. Such participation shall take place in accordance with the provisions of Article 26(5), second subparagraph, and subject to the terms and conditions of the joint procurement agreement.

7.   Any Member State not participating in the joint action as provided in Article 26(1) but choosing to appoint an opt-out auction platform may join the joint action provided for in Article 26(1), pursuant to Article 26(5).

The volume of allowances that were scheduled to be auctioned on an opt-out auction platform shall be spread evenly over the auctions conducted by the relevant common auction platform.

Article 30 Tasks of opt-out auction platforms

An opt-out auction platform shall carry out the same tasks as the common auction platform, as provided for in Article 27, except managing the auction calendar as referred to in Article 27(1), point (c), and it shall submit the exit strategy referred to in Article 27(3) to the appointing Member State.

The provisions provided for in Article 8(1), (2), (3) and (5), first subparagraph, and Articles 9, 10, 12, 14 and 31 shall apply to the opt-out auction platforms.

Article 31 Auction calendar for opt-out auction platforms

1.   The volume of allowances referred to in Article 10 auctioned in individual auctions conducted by an opt-out auction platform shall be between 3,5 million and 20 million allowances. Where the total volume of such allowances to be auctioned by the Member State is less than 3,5 million in a given calendar year, the allowances shall be auctioned in a single auction per calendar year. However, the volume of allowances referred to in Article 10 auctioned in an individual auction conducted by an opt-out auction platform shall be no less than 1 million allowances in any period 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 referred to in Article 11 auctioned in individual auctions conducted by an opt-out auction platform shall be between 2,5 million and 5 million allowances. Where the total volume of such allowances to be auctioned by the Member State is less than 2,5 million in a given calendar year, the allowances shall be auctioned in a single auction per calendar year.

From 1 January 2025, provisions of paragraph 1 of this Article applying to allowances referred to in Article 10 shall also apply to allowances referred to in Article 11.

3.   The opt-out auction platform shall, after consulting the Commission, determine the auction calendar, including the bidding windows, the individual auction volumes, the auction dates, the auctioned product and the payment and delivery dates for the allowances to be auctioned in individual auctions for each calendar year. The individual auction volumes shall be determined in accordance with Articles 10 and 11.

The opt-out auction platform concerned shall publish the auction calendar for a given year by 31 July of the previous year with regard to allowances referred to in Articles 10 and 11 of this Regulation, or as soon as practicable thereafter, provided that the Commission has instructed the central administrator of the Union Registry to enter the respective auction table into the Union Registry in accordance with Delegated Regulation (EU) 2019/1122.

The opt-out auction platform concerned shall determine and publish the auction calendars only after the common auction platform has determined and published its auction calendars in accordance with Article 12, unless such auction platform has not yet been appointed pursuant to Article 26(1). The auction platforms concerned may simultaneously determine the auction calendars for allowances referred to in Articles 10 and 11, as long as the deadline for publication of the auction calendars referred to in Article 12 is respected.

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

4.   Where an auction conducted by an opt-out auction platform is cancelled 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.

Article 32 Appointment requirements applicable to auctioneers

1.   When appointing auctioneers, the Member States shall take into account the extent to which candidates:

(a)

exhibit a 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;

(b)

are able to fulfil the auctioneer’s tasks in a timely manner and in accordance with the highest professional and quality standards.

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

Article 33 Appointment requirements applicable to auction platforms

1.   Only an entity authorised as a regulated market whose operator organises a secondary market in allowances or allowances derivatives may be appointed as auction platform.

However, where it is provided for in the procurement documents for the joint procurement procedure pursuant to Article 26(1), an entity authorised as 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  ( 24 ) , 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. Where such entity is appointed as a common auction platform, its operator shall acquire an authorisation for organising a secondary market in allowances or allowances derivatives and shall ensure that it organises such secondary market at least 60 trading days prior to the opening of the first bidding window run by the auction platform concerned.

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

3.   When appointing an auction platform, the Member States shall take into account the extent to which candidates demonstrate that the following is ensured:

(a)

respect of the principle of non-discrimination both de facto and de jure;

(b)

full, fair and equitable access to bid in the auctions for SMEs covered by the Union system and to bid in the auctions for small emitters, as set out in Article 27(1), Article 27a(1) and Article 28a(4) of Directive 2003/87/EC;

(c)

cost-efficiency and avoidance of 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)

avoidance of distortions of competition in the internal market, including the carbon market;

(f)

proper functioning of the carbon market, including the implementation of the auctions;

(g)

connection to one or more clearing systems or settlement systems;

(h)

adequate measures requiring an auction platform to hand over all tangible and intangible assets necessary for the conduct of the auctions by its successor.

4.   An auction platform may only be appointed where the Member State in which 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 contracts and that the competent authorities of that Member State are able to authorise and supervise the candidate regulated market and its market operator in accordance with the national measures transposing Title VI of that Directive.

Where the candidate regulated market and its market operator are not established in the same Member State, the first subparagraph 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 in which the candidate regulated market and its market operator are established, designated under Article 67(1) of Directive 2014/65/EU, shall decide on the authorisation of a regulated market appointed, or to be appointed, as an auction platform pursuant to this Regulation, provided that the regulated market and its market operator comply with the national rules transposing Title III of Directive 2014/65/EU. The decision on authorisation shall be taken in accordance with the national rules transposing Title VI of Directive 2014/65/EU.

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 candidate regulated market and its market operator.

For the purposes of appointing auction platforms in accordance with this Regulation, 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 the European Securities and Markets Authority (ESMA).

Article 34 Obligation to report transactions

1.   The auction platform shall report to the competent national authority designated pursuant to Article 67(1) of Directive 2014/65/EU and to ESMA 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 transaction reports shall be submitted as soon as possible, and no later than the close of the trading day following the transaction concerned.

3.   The auction platform shall be responsible for the completeness, accuracy and timely submission of the transaction reports. Where there is information on the transactions which are not included in the transaction reports and which are not available to the auction platform, the bidders and the auctioneers shall submit such information to the auction platform.

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

4.   The transaction report shall, in particular, include the following:

(a)

the name of the allowances or allowances derivatives;

(b)

the volume of allowances bought;

(c)

the dates and times of execution of the transaction;

(d)

the transaction prices;

(e)

the identity of the successful bidders;

(f)

where applicable, the identity of the clients on whose behalf the transaction was executed.

Where the successful bidder is a legal person, the auction platform shall, when reporting the designation to identify the successful bidder, use a legal entity identifier referred to in Article 5 of Commission Delegated Regulation (EU) 2017/590  ( 25 ) .

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

Article 35 Payment by successful bidders and transfer of proceeds to the Member States

1.   Each successful bidder or its successors in title, including any intermediaries acting on their behalf, shall pay the sum due notified to it pursuant to Article 52(3), point (c), for the allowances won as notified to it pursuant to Article 52(3), point (a), by transferring that sum, or arranging for its transfer through the clearing system or settlement system, to the auctioneer’s nominated bank account in cleared funds at the latest upon delivery of the allowances into the bidder’s nominated Union Registry account or the nominated Union Registry holding account of its successor in title.

2.   An auction platform, including the clearing systems or settlement systems connected to it, shall transfer the payments made by the bidders or any successors in title arising from the auctioning of allowances referred to in Articles 10, 11 and 13 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 is used for the payments made by the bidders, provided that the clearing system or settlement system concerned is capable of handling the currency in question.

4.   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 36 Consequences of late or non-payment

1.   A successful bidder, or its successors in title, shall only be delivered allowances notified to the successful bidder pursuant to Article 52(3), point (a), if the entire sum due notified to it pursuant to Article 52(3), point (c), is paid to the auctioneer pursuant to Article 35(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 52(3), point (d), shall be in default of payment.

3.   A bidder in default of payment may be charged with either or both of the following:

(a)

interest for each day beginning with the date on which payment was due pursuant to Article 52(3), point (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.   Where a successful bidder is in default of payment one of the following shall also occur:

(a)

the central counterparty shall 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.

Article 37 Transfer of the auctioned allowances

Allowances auctioned by any auction platform shall be transferred by the Union registry prior to the opening of a bidding window, into a nominated Union Registry 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 38 Delivering the auctioned allowances

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 52(3), point (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 52(3), point (a).

2.   Upon payment of the sum due pursuant to Article 35(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 according to the two-day spot contract by transferring the allowances notified to the bidder pursuant to Article 52(3), point (a), from a nominated Union Registry account held in escrow by the clearing system or settlement system acting as custodian, in whole or in part into one or more nominated Union Registry accounts held by the successful bidder or by its successors in title, or into a nominated holding Union Registry account held in escrow by a clearing system or settlement system acting as custodian for the successful bidder or its successors in title.

Article 39 Late delivery of the auctioned allowances

Where the clearing system or settlement system fails to deliver all or part of the auctioned allowances due to circumstances outside its control, it shall deliver the allowances at the earliest opportunity and the successful bidders or their successors in title shall accept delivery at that later date. No other remedy for late delivery shall be available for the successful bidder or its successors in title.

Article 40 Collateral given by the bidder

1.   Prior to the opening of the bidding window for the auctioning of two-day spot contracts, bidders or any intermediaries acting on their behalf shall be required to give collateral to the clearing system or settlement system linked to the auction platform conducting the auctions.

2.   If so requested, any unused collateral given 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 given 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 41 Collateral given by the auctioneer

1.   Prior to the opening of the bidding window for the auctioning of two-day spot contracts, the auctioneer shall be required to give collateral by giving allowances to be held in escrow by the clearing system or settlement system acting as custodian, pending their delivery. The volume and delivery date of those allowances shall be specified in the auction tables corresponding to the auction calendars referred to in Article 12 or 13, in accordance with Delegated Regulation (EU) 2019/1122.

2.   Where any allowances given as collateral under 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 Union Registry account held in escrow by the clearing system or settlement system acting as custodian, pending their delivery.

Article 42 Structure and level of fees

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

However, where it is provided for in the procurement documents for the procurement procedures pursuant to Article 26(1) or Article 29(4), the operator of the auction platform may increase the fees paid by the successful bidders pursuant to Article 43(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 Articles 1 and 1a of Decision (EU) 2015/1814.

2.   An auction platform and the clearing systems and settlement systems 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 43 Costs of the auction process

1.   The costs of the services provided for in Article 27(1) and Article 30 shall be borne by the bidders and paid for through fees.

However, the costs of the arrangements between the auctioneer and the auction platform referred to in Article 22(2) allowing the auctioneer to auction allowances on behalf of the appointing Member State, except 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 second subparagraph shall be deducted from the auction proceeds payable to the auctioneers pursuant to Article 35(2) and (3).

2.   The terms and conditions of the joint procurement agreement referred to in Article 26(5), first subparagraph, 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 29(3) of their decision not to participate in the joint action as provided in Article 26(1), but subsequently make use of the common auction platform, to pay to the auction platform concerned, including the clearing systems or settlement systems 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 common auction platform until the termination or expiry of the term of appointment of that auction platform.

The first subparagraph 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(5).

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 Article 29(4), second subparagraph, or where a Member State uses the common auction platform to auction its share of allowances in the absence of a listing referred to in Article 29(6).

3.   The costs borne by the bidders in accordance with paragraph 1 shall be reduced by the amount of the costs borne by a Member State in accordance with paragraph 2.

Article 44 Monitoring of auctions

1.   By the end of each month, an auction platform 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 referred to in 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 of while carrying out its tasks pursuant to Article 27 or Article 30;

(g)

any breach of this Regulation or of Article 10(4) of Directive 2003/87/EC that the auction platform has been made aware of while carrying out its task pursuant to Article 27 or Article 30 of this Regulation;

(h)

follow-up to any information reported in accordance with points (a) to (g).

In addition, by 31 January of each year, the auction platform shall provide a summary and an analysis of the monthly reports of the previous year.

2.   The auction platform shall provide the reports and the summary referred to in paragraph 1 to the Commission, to its appointing Member States, to its competent national authority designated in accordance with Article 22 of Regulation (EU) No 596/2014 and to ESMA.

3.   The relevant contracting authorities shall monitor the implementation of the contracts appointing the auction platforms. The Member States appointing an opt-out auction platform 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 shall, on behalf of the Member States participating in the joint action pursuant to Article 26(1) of this Regulation and the Member States appointing an opt-out auction platform, publish summary reports in respect of the information referred to in paragraph 1, points (a) to (h), of this Article.

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

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

7.   When fulfilling their obligations under paragraphs 5 and 6, the competent national authorities shall take into account professional secrecy considerations to which those authorities are subject under Union law.

Article 45 Monitoring the relationship with bidders

1.   An auction platform shall monitor the relationship with bidders by taking the following action:

(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 18(3) and Article 19 with its market conduct rules;

(c)

monitoring transactions undertaken by persons admitted to bid pursuant to Article 18(3) and Article 19 and by politically exposed persons 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.

Where scrutinising bids in accordance with the first subparagraph, point (a), the auction platform 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 shall ensure that the documents, data or information it holds concerning a bidder are kept up-to-date. For this purpose, it may:

(a)

request any information of the bidder, pursuant to Article 18(3), Article 19(2) 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 the termination of its admission to bid;

(b)

require a bidder to re-submit an application for admission to bid at regular intervals;

(c)

require a bidder to promptly notify the auction platform concerned of any changes to the information submitted to it pursuant to Article 18(3), Article 19(2) and Article 20(5) and (7).

3.   An auction platform shall keep records of the following:

(a)

the application for admission to bid submitted by an applicant pursuant to Article 18(3) and Article 19(2), 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 with the bidder, pursuant to points (a) and (c) of paragraph 1;

(c)

all information relating to a given bid submitted by a given bidder in an auction, including any withdrawal or modification of such bid, pursuant to Article 6(3), second subparagraph, 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 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 46 Notification of money laundering, terrorist financing or criminal activity

1.   The competent national authorities referred to in Article 48(1a) of Directive (EU) 2015/849 shall monitor, and take the necessary measures to ensure, compliance of an auction platform with the following:

(a)

the customer due diligence measures referred to in Article 19(2), point (e), and Article 20(8) of this Regulation;

(b)

the obligation to refuse to grant admission to bid or to revoke or suspend any admission to bid already granted pursuant to Article 21(1) and (2) of this Regulation;

(c)

the monitoring and record keeping requirements set out in Article 45 of this Regulation;

(d)

the notification requirements set out in paragraphs 2 and 3.

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

An auction platform may be held liable for infringements of paragraphs 2 and 3 of this Article and of Article 20(5) and (8), Article 21(1) and (2), and Article 45 of this Regulation. The sanctions and measures referred to in Articles 58 to 62 of Directive (EU) 2015/849 shall apply to such infringements.

2.   An auction platform, its directors and employees, shall cooperate fully with the FIU by promptly acting the following action:

(a)

informing the FIU, including by submitting to it a report, on their own initiative, where they know, suspect or have reasonable grounds to suspect that any funds in relation to the auctions 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 to fulfil its tasks.

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.

4.   The Member State in whose territory an auction platform appointed pursuant to this Regulation is situated shall ensure that the national measures transposing Articles 37, 38, 39 and 42, Article 45(1) and Article 46 of Directive (EU) 2015/849 apply to the auction platform concerned.

Article 47 Notification of market abuse

1.   An auction platform shall report to the national authorities competent under Regulation (EU) No 596/2014 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 and ESMA 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 market abuse or attempted market abuse referred to in that paragraph.

Article 48 Maximum bid-size and other remedial measures

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 an auction platform after consulting the Commission and obtaining its opinion thereon, provided that implementation of such bid-size or 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 as a percentage of the total number of auctioned allowances in any given year, whichever the auction platforms finds 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 49 Market conduct rules and other contractual arrangements

An auction platform shall be entitled to take any other action under its market conduct rules and 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 set out in Articles 44 to 48.

Article 50 Conduct rules for persons authorised to bid on behalf of others

1.   This Article shall apply to:

(a)

persons authorised to bid pursuant to Article 18(2);

(b)

investment firms and credit institutions referred to Article 18(1), points (b) and (c).

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;

(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;

(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, which shall not impose any unfair conditions or restrictions on the client concerned and which shall provide for all the terms and conditions relating to the services offered, including 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), points (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;

(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, the collection of payments and collateral from their clients, and the transfer of allowances to their clients;

(k)

they shall prevent the disclosure of confidential information from the part of their business responsible for receiving, preparing and submitting bids on behalf of their clients to the part of their business responsible for preparing and submitting bids on their own account or to the 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 the first subparagraph, point (e), shall be calculated on a just and reasonable basis and shall be set out in the agreements referred to in point (d) of that subparagraph. Any part of that deposit not used to satisfy payment for allowances shall be refunded to the client within a reasonable period after the auction as stated in the agreements referred to in the first subparagraph, 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:

(a)

they shall provide any information requested by any auction platform where they are admitted to bid;

(b)

they shall act with integrity, reasonable skill, care and diligence.

4.   The competent national authorities designated in accordance with Regulation (EU) No 596/2014 and Directive (EU) 2015/849 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 set out 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 those 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 to serve the best interests of their clients;

(c)

they comply with the requirements of Directive (EU) 2015/849;

(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 set out in paragraph 5. The Member State shall ensure that:

(a)

its competent national authorities have at their disposal 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 an authorised person has seriously and systematically infringed the provisions set out in paragraphs 2 and 3.

7.   Clients of persons referred to in paragraph 1 may direct any complaints that they may have with regard to compliance with the conduct rules set out in paragraphs 2 and 3 to the competent authorities referred to in paragraph 4 in accordance with the procedural rules laid down for the handling of such complaints.

8.   Persons referred to in paragraph 1 shall be allowed, without further legal or administrative requirements of the Member States, to provide bidding services to clients referred to in Article 18(3), first subparagraph, point (a).