Talk:EU Emissions Annex Wikitext: Difference between revisions

 

{{euaprov|(a)}} '''{{euaprov|Scope}}'''<br>  

This Annex applies to {{isdaprov|Transaction}}s that specify the {{euaprov|Fourth Compliance Period}} as the applicable “{{euaprov|Specified Compliance Period}}” (“'''{{euaprov|EU Emissions Allowance Transaction}}s'''”). <br>

{{euaprov|(b)}} '''{{euaprov|ISDA Definitions}}''' <br>

The [[2006 ISDA Definitions]], are incorporated into this Annex. If there is any inconsistency between them and this Annex, this Annex will govern. <br>

{{euaprov|(c)}} '''{{euaprov|Multiple Delivery Dates}}'''<br>

If there is more than one {{euaprov|Delivery Date}} and each such {{euaprov|Delivery Date}} has a specified:  

:(ii) an {{euaprov|Allowance Purchase Price}}; <br>

:(iii) the {{euaprov|Allowance Type}} (and {{euaprov|Specified Compliance Period}}); and <br>

:(iv) the {{euaprov|Number of Allowances}}, <br>

the relevant {{euaprov|EU Emissions Allowance Transaction}} will consist of a number of {{euaprov|EU Emissions Allowance Transaction}}s: each corresponding with one of the specified {{euaprov|Delivery Date}}s, and having the specified {{euaprov|Payment Date}}, {{euaprov|Allowance Purchase Price}}, {{euaprov|Allowance Type}} (and {{euaprov|Specified Compliance Period}}) and {{euaprov|Number of Allowances}} for that {{euaprov|Delivery Date}}. <br>  

{{euaprov|(d)}}''' {{euaprov|Terms}}''' <br>

For each {{euaprov|EU Emissions Allowance Transaction}}: <br>

:(A) '''{{euaprov|Allowance Forward Transaction}}s''': on the {{euaprov|Payment Date}}, {{euaprov|Buyer}} must pay to {{euaprov|Seller}} the {{euaprov|Allowance Purchase Price}} multiplied by the {{euaprov|Number of Allowances}} and on the {{euaprov|Delivery Date}} {{euaprov|Seller}} must deliver to {{euaprov|Buyer}} the {{euaprov|Allowances to be Delivered}} and {{euaprov|Buyer}} must accept the {{euaprov|Allowances to be Delivered}}.  

:(B) '''{{euaprov|Allowance Option Transaction}}s''': for each {{euaprov|Exercise Date}}, on the relevant {{euaprov|Payment Date}} {{euaprov|Receiving Party}} must pay to {{euaprov|Delivering Party}} the {{euaprov|Allowance Strike Price}} multiplied by the {{euaprov|Number of Allowances}} to be {{euaprov|Delivered}} and on the relevant {{euaprov|Delivery Date}} {{euaprov|Delivering Party}} must deliver to {{euaprov|Receiving Party}} the {{euaprov|Allowances to be Delivered}}, and {{euaprov|Receiving Party}} must accept the {{euaprov|Allowances to be Delivered}}. <br>

{{euaprov|(d)(i)(2)}} '''{{euaprov|Delivery}}''' <br>

:(A) {{euaprov|Delivering Party}}’s obligation to deliver {{euaprov|Allowances}} under an {{euaprov|EU Emissions Allowance Transaction}} may be discharged by the completed transfer of those {{euaprov|Allowances}} from a {{euaprov|Holding Account}} of {{euaprov|Delivering Party}} under the {{euaprov|Scheme}}. A transfer will be completed when the relevant {{euaprov|Allowances}} are received at the relevant {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}}, whereupon risk of loss of {{euaprov|Allowances}} transfers from {{euaprov|Delivering Party}} to {{euaprov|Receiving Party}}.

:(B) Notwithstanding Part {{euaprov|(d)(i)(2)}}(A) above, if {{euaprov|Delivering Party}} has any {{euaprov|Specified Holding Account}}s for the relevant {{euaprov|EU Emissions Allowance Transaction}}, {{euaprov|Delivering Party}}’s obligation to deliver {{euaprov|Allowances}} under an {{euaprov|EU Emissions Allowance Transaction}} shall be limited to an obligation to deliver from any such {{euaprov|Specified Holding Account}} of {{euaprov|Delivering Party}} to the relevant {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}}.  

:(C) Where {{euaprov|Receiving Party}} has more than one {{euaprov|Specified Holding Account}} for an {{euaprov|EU Emissions Allowance Transaction}}, such {{euaprov|Specified Holding Account}}s are set out in order of preference. {{euaprov|Delivering Party}} must deliver the {{euaprov|Allowances to be Delivered}} to the first listed {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}} on the {{euaprov|Delivery Date}} unless, for such {{euaprov|Receiving Party}}’s {{euaprov|Specified Holding Account}}, it is prevented from so doing by an event or circumstance that would be a {{euaprov|Settlement Disruption Event}} or a {{euaprov|Suspension Event}} if the first listed {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}} were the only {{euaprov|Specified Holding Account}} so listed. In such circumstances, this paragraph will apply iteratively to the next listed {{euaprov|Receiving Party}}’s {{euaprov|Specified Holding Account}} ([[if any]]).

:(D) If a transfer of {{euaprov|Allowances}} is completed after 4:00 p.m., Central European Time, on a {{euaprov|Delivery Business Day}} or at any time on any day other than a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on the next following {{euaprov|Delivery Business Day}}. If a transfer of {{euaprov|Allowances}} is completed before 10:00 a.m., Central European Time, on a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on that day. <br>

{{euaprov|(d)(i)(3)}} '''{{euaprov|Netting}}''': If on any date {{euaprov|Allowances}} of the same {{euaprov|Allowance Type}} and {{euaprov|Specified Compliance Period}} would otherwise be deliverable for several {{euaprov|EU Emissions Allowance Transaction}}s by each party to the other and, if applicable, between the same pair of {{euaprov|Holding Account}}s of the parties, then, on such date, each party’s obligation to make delivery of any such {{euaprov|Allowances}} will be automatically satisfied and discharged and, if the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by one party exceeds the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by the other party, replaced by an obligation upon the party by which the larger aggregate amount would have been deliverable to deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount. <br>

 

 

{{euaprov|(d)(iii)}} '''{{euaprov|Partial Settlement}}''' <br>

If, on the {{euaprov|Delivery Date}}, {{euaprov|Delivering Party}} delivers to {{euaprov|Receiving Party}} fewer {{euaprov|Allowances}} than the {{euaprov|Allowances to be Delivered}} (the “'''{{euaprov|Allowance Shortfall}}'''”), {{euaprov|Receiving Party}}’s obligation to pay under {{euaprov|Physical Settlement}} above shall be reduced by the {{euaprov|Allowance Shortfall}} multiplied by either the {{euaprov|Allowance Purchase Price}} (for an {{euaprov|Allowance Forward Transaction}}) or the {{euaprov|Allowance Strike Price}} (for an {{euaprov|Allowance Option Transaction}}), and  “{{euaprov|Failure to Deliver}}” above will apply for the {{euaprov|Allowance Shortfall}} (with references to {{euaprov|Number of Allowances}} (for an {{euaprov|Allowance Forward Transaction}}) and {{euaprov|Allowances to be Delivered}} (for an {{euaprov|Allowance Option Transaction}}) being read as references to the {{euaprov|Allowance Shortfall}}). <br>

{{euaprov|(d)(iv)}} '''{{euaprov|Abandonment of Scheme}}'''<br>

(1) If before the {{euaprov|Delivery Date}} the Scheme is, due to an official written public pronouncement by the European Community, no longer scheduled to proceed or is to be discontinued, either party may, by written notice to the other party, terminate the relevant {{euaprov|EU Emissions Allowance Transaction}}, in which case neither party shall have any further delivery or payment obligations under or for that {{euaprov|EU Emissions Allowance Transaction}} (other than for any payment due by one party in connection with delivery obligations already performed by the other party) and, a payment shall not be due under Section {{isdaprov|6(e)}} of the {{isdaprov|Agreement}} or otherwise for such termination. <br>

(2) If there is a termination under sub-clause (1) {{euaprov|Delivering Party}} must promptly refund to {{euaprov|Receiving Party}} any amount that may have been paid by {{euaprov|Receiving Party}} for the {{euaprov|EU Emissions Allowance Transaction}} that is an {{euaprov|Allowance Forward Transaction}} or a {{euaprov|Call}} and {{euaprov|Receiving Party}} must promptly refund to {{euaprov|Delivering Party}} any amount that may have been paid by {{euaprov|Delivering Party}} for an {{euaprov|EU Emissions Allowance Transaction}} which is a {{euaprov|Put}} together with interest on that amount in the same currency as that amount from the date that amount was paid until the date of termination of the {{euaprov|EU Emissions Allowance Transaction}} under sub-clause (1), at the rate certified by the party required to refund the amount to be a rate offered to such party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by that party for purposes of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in the relevant market. <br>

{{euaprov|(d)(v)}} '''{{euaprov|Invoicing}}'''<br>

From the {{euaprov|Delivery Date}}, {{euaprov|Delivering Party}} shall send to {{euaprov|Receiving Party}} a valid VAT invoice (applicable in the jurisdiction of supply) setting forth the number of {{euaprov|Allowances}} delivered, or that would have been delivered but for Part {{euaprov|(d)(i)(3)}} (''{{euaprov|Netting}}''), above, and {{euaprov|Allowance Price}}s, stating the total amount payable by {{euaprov|Receiving Party}} and stating the amount of VAT, if any, properly chargeable thereon (a “'''{{euaprov|VAT Invoice}}'''”). <br>

{{euaprov|(d)(vi)}} '''{{euaprov|Requirements under the Scheme}}'''<br>

:(1) ensure that on a {{euaprov|Delivery Date}} or {{euaprov|Delayed Delivery Date}} ([[as the case may be]]) it has any {{euaprov|Holding Account}}s validly registered under the {{euaprov|Registries Regulation}} and where it has any {{euaprov|Specified Holding Account}}s, ensure that on a {{euaprov|Delivery Date}} or {{euaprov|Delayed Delivery Date}} ([[as the case may be]]) it has all such {{euaprov|Specified Holding Account}}s validly registered under the {{euaprov|Registries Regulation}} ;

:(2) where it is {{euaprov|Delivering Party}}, ensure that each {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}} is nominated as a “trusted account” in its “trusted account list” for each of its {{euaprov|Holding Account}}s for the purposes of the {{euaprov|Registries Regulation}}; and  

:(3) conduct its affairs so as not to give any {{euaprov|Relevant Authority}} cause to block, suspend, refuse, reject or cancel the transfer (whether in whole or in part) of Allowances requested to be made under any {{euaprov|EU Emissions Allowance Transaction}}. <br>  

 

{{euaprov|(d)(viii)}} '''{{euaprov|Value Added Taxes}}'''<br>

:(1) All amounts referred to in this Annex or in a {{euaprov|Confirmation}} for an {{euaprov|EU Emissions Allowance Transaction}} are exclusive of any applicable {{euaprov|Value Added Taxes}} (“'''{{euaprov|VAT}}'''”) which are or may become chargeable for the supply or supplies for which such sums form the whole or part of the consideration for {{euaprov|VAT}} purposes, and any such {{euaprov|VAT}} shall be payable in addition to any such other consideration under the provisions set out below.

:(2) {{euaprov|Receiving Party}} shall either (A) subject to receipt of an appropriate {{euaprov|VAT Invoice}} for such supply or supplies stating inter alia the amount of VAT properly chargeable thereon (the “{{euaprov|VAT Amount}}”), pay to {{euaprov|Delivering Party}} a sum equal to the {{euaprov|VAT Amount}} on the Payment Date; or (B) where, under the applicable {{euaprov|VAT}} legislation, {{euaprov|Receiving Party}} is required to self-assess and account for any {{euaprov|VAT}} chargeable for such supply, account for such {{euaprov|VAT}}.

:(3) On each date on which an {{euaprov|EU Emissions Allowance Transaction}} is entered into, {{euaprov|Receiving Party}} represents to {{euaprov|Delivering Party}} that:

::(A) for {{euaprov|VAT}} purposes, {{euaprov|Receiving Party}} receives the services supplied under the {{euaprov|EU Emissions Allowance Transaction}} in connection with an establishment of {{euaprov|Receiving Party}} in that party’s {{euaprov|VAT Jurisdiction}}; and

::(B) it is a taxable person for the purposes of Article 9 of the European Community Directive 2006/112/EC and receives such supply for the purposes of a business carried on by it.

:(4) Subject to each party’s obligations relating to {{euaprov|VAT}}, each party shall cause all royalties, {{isdaprov|Taxes}}, duties, and other sums (including any environmental tax or levy) legally payable by that party arising in connection with an {{euaprov|EU Emissions Allowance Transaction}} to be paid, and shall reimburse the other party to the extent that party is required to pay any such royalties, {{isdaprov|Taxes}}, duties or other sums for which the first party is primarily liable. <br>  

Except to the extent included in any amount payable under Section {{isdaprov|6(e)}} of the {{isdaprov|Agreement}}, any payment for {{euaprov|Receiving Party’s Replacement Cost}} or {{euaprov|Delivering Party’s Replacement Cost}}, or any payment for {{euaprov|Encumbrance Loss Amount}}, neither party is liable to the other, whether in contract, tort (including [[negligence]] and breach of duty) or otherwise, for any business interruption or loss of use, profits, contracts, production or revenue or for any [[Consequential loss|consequential]] or [[indirect loss]] or [[Damages|damage]] of any kind however arising. <br>  

{{euaprov|(d)(x)}} '''{{euaprov|Other Fees and Expenses}}'''<br>

All costs, fees and charges assessed or imposed by a {{euaprov|Relevant Authority}} in connection with the transfer of {{euaprov|Allowances}} under an {{euaprov|EU Emissions Allowance Transaction}} shall be the responsibility of the party upon whom such costs, fees or charges are allocated by the {{euaprov|Relevant Authority}}. <br>  

{{euaprov|(d)(xi)}} '''{{euaprov|Failure to Deliver (Alternative Method) - EEP Applicable}}'''<br>

If “{{euaprov|Failure to Deliver (Alternative Method)}}” and “{{euaprov|EEP}}” are specified to be applicable in the Annex to this Annex or the {{euaprov|Confirmation}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}, then, with regard to that {{euaprov|EU Emissions Allowance Transaction}}, if {{euaprov|Receiving Party}} incurs an {{euaprov|Excess Emissions Penalty}} directly caused by {{euaprov|Delivering Party}}’s failure to deliver the {{euaprov|Allowances to be Delivered}} on a {{euaprov|Delivery Date}} falling within the {{euaprov|EEP Risk Period}} other than because of the failure of {{euaprov|Receiving Party}} to comply with the {{euaprov|Requirements under the Scheme}} as specified above, the existence of an {{isdaprov|Illegality}}, the existence of a {{euaprov|Settlement Disruption Event}} or the existence of a {{euaprov|Suspension Event}} (the “'''{{euaprov|EEP Non-delivery}}'''” and the amount of such {{euaprov|Excess Emissions Penalty}} so caused, the “'''{{euaprov|Indemnifiable EEP}}'''”), then {{euaprov|Delivering Party}} must pay to {{euaprov|Receiving Party}}, in addition to the {{euaprov|Receiving Party’s Replacement Cost}} (if any), the amount of the {{euaprov|Indemnifiable EEP}} paid by {{euaprov|Receiving Party}} (the “{{euaprov|EEP Payment}}”), provided that such {{euaprov|EEP Payment}} shall not exceed the product of the {{euaprov|RPRC Shortfall}} for that {{euaprov|EU Emissions Allowance Transaction}} and the maximum per Allowance rate of {{euaprov|Excess Emissions Penalty}} applicable at the relevant time.

{{euaprov|Delivering Party}}’s obligation to pay the {{euaprov|EEP Payment}} for the {{euaprov|EEP Non-delivery}} shall be conditional upon {{euaprov|Receiving Party}} demonstrating to the reasonable satisfaction of {{euaprov|Delivering Party}}:

:(d) the extent to which {{euaprov|Receiving Party}}’s liability to make the {{euaprov|EEP Payment}} arose due to any third party’s failure(s) to deliver any Allowance to be Delivered to {{euaprov|Receiving Party}} under the terms of any agreements between {{euaprov|Receiving Party}} and such third party.

If the {{euaprov|Deadline Shortfall}} is directly caused by the failure of a number of parties (including {{euaprov|Delivering Party}} and {{euaprov|Receiving Party}}), then {{euaprov|Delivering Party}}’s liability shall be to pay the {{euaprov|EEP Payment}} for its proportionate share of the {{euaprov|Deadline Shortfall}} as determined by the parties in a commercially reasonable manner. In no circumstances shall {{euaprov|Receiving Party}} seek to claim an {{euaprov|EEP Payment}} from {{euaprov|Delivering Party}} such that when aggregated with all the other claims made by {{euaprov|Receiving Party}} to other parties for its liability to make the {{euaprov|EEP Payment}} and the liability caused by {{euaprov|Receiving Party}}’s own action or inaction, it is more than {{euaprov|Receiving Party}}’s liability to make the {{euaprov|EEP Payment}}.

If {{euaprov|Delivering Party}} disputes in good faith the amount of the {{euaprov|EEP Payment}} claimed by {{euaprov|Receiving Party}}, {{euaprov|Delivering Party}} shall so notify {{euaprov|Receiving Party}} stating the reasons for the dispute and the obligation to pay the {{euaprov|EEP Payment}} shall be suspended until such dispute is resolved. The parties shall seek to settle the dispute regarding the {{euaprov|EEP Payment}} as soon as reasonably possible.

Once the amount of the {{euaprov|EEP Payment}} is agreed or any dispute in relation thereto resolved, {{euaprov|Delivering Party}} must pay such determined {{euaprov|EEP Payment}} to {{euaprov|Receiving Party}} within two (2) Business Days against {{euaprov|Receiving Party}}’s {{euaprov|VAT Invoice}} in respect thereof. <br>  

{{euaprov|(d)(xii)}} '''{{euaprov|Specified Holding Accounts and Modifications of Party’s Specified Holding Accounts}}'''<br>

:(1) for {{euaprov|Receiving Party}}:

::(A) {{euaprov|Receiving Party}} shall ensure that any of such {{euaprov|Holding Account}}s registered under Part {{euaprov|(d)(vi)}}(''{{euaprov|Requirements under the Scheme}}'') above are specified; and

::(B) {{euaprov|Receiving Party}} may from time to time (a) amend the order in which its {{euaprov|Specified Holding Account}}s are listed, (b) add a new {{euaprov|Specified Holding Account}} as the last on the list of {{euaprov|Specified Holding Account}}s, or (c) remove a {{euaprov|Specified Holding Account}} from those listed, in each case for an {{euaprov|EU Emissions Allowance Transaction}}, provided that it notifies {{euaprov|Delivering Party}} in writing of such amendment, addition or removal (including the provision of the relevant account details) no less than thirty (30) calendar days prior to the next {{euaprov|Delivery Date}} under that {{euaprov|EU Emissions Allowance Transaction}}, and provided further that for (a) and / or (c), {{euaprov|Delivering Party}} notifies {{euaprov|Receiving Party}} in writing that it consents to such changes within five (5) {{euaprov|Delivery Business Day}}s of receiving such notice from {{euaprov|Receiving Party}};  

:(2) for {{euaprov|Delivering Party}}:  

::(A) {{euaprov|Delivering Party}} may specify any of such {{euaprov|Holding Account}}s registered under Part 7 (d)(vi)(Requirements under the Scheme) above in the Annex to this Annex or in the relevant Confirmation; and

::(B) {{euaprov|Delivering Party}} may from time to time, add a new {{euaprov|Holding Account}} or an additional {{euaprov|Holding Account}} to those listed in the Annex to this Annex or in the relevant Confirmation provided that it notifies {{euaprov|Receiving Party}} in writing of such addition (including the relevant account details) by the day that is ten (10) {{euaprov|Delivery Business Day}}s before the next {{euaprov|Delivery Date}} under that {{euaprov|EU Emissions Allowance Transaction}}. <br>  

{{euaprov|(e)}} '''{{euaprov|Defined Terms and Interpretation}}'''<br>

 

 

'''{{euaprov|Allowance}}''': Means an allowance to emit one tonne of carbon dioxide (CO2) equivalent during a specified period which is valid for meeting emissions related commitment obligations under the {{euaprov|Scheme}} and which is of the specified {{euaprov|Allowance Type}} and relates to the {{euaprov|Specified Compliance Period}}. <br>

'''{{euaprov|Allowance Option Transaction}}''': Means an {{euaprov|EU Emissions Allowance Transaction}} identified as an {{euaprov|Allowance Option Transaction}} in the related {{isdaprov|Confirmation}}. An {{euaprov|Allowance Option Transaction}} shall be an {{isdadefsprov|Option Transaction}} for purposes of the {{euaprov|2006 ISDA Definitions}}. <br>

'''{{euaprov|Allowances to be Delivered}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} that is:  

:(2) an {{euaprov|Allowance Option Transaction}} and for an {{euaprov|Exercise Date}}, a number of {{euaprov|Allowances}} equal to the number of {{isdadefsprov|Option}}s exercised or deemed exercised on that Exercise Date multiplied by the {{euaprov|Option Entitlement}}. <br>

'''{{euaprov|Allowance Purchase Price}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Forward Transaction}}, the amount specified as such. <br>

'''{{euaprov|Allowance Shortfall}}'''is defined in {{euaprov|(d)(iii)}} (''{{euaprov|Partial Settlement}}''). <br>

 

 

'''{{euaprov|Allowance Type}}''': Means an {{euaprov|AEU Allowance}} or an {{euaprov|EU Allowance}} as specified. <br>

'''{{euaprov|Appropriate Source}}''': Means any “competent authority” (as defined in the {{euaprov|Registries Regulation}}) or the {{euaprov|Central Administrator}}, {{euaprov|National Administrator}} or any other authority having power under the {{euaprov|Directive}} or the {{euaprov|Registries Regulation}} to block, suspend, refuse, reject, cancel or otherwise affect the transfer (whether in whole or in part) of {{euaprov|Allowances}}, any recognised law enforcement or tax authorities of a Member State, the European Anti-fraud Office of the European Commission or Europol. <br>

'''{{euaprov|Buyer}}''' will be specified in the {{isdaprov|Confirmation}}. <br>

'''{{euaprov|Buy-In}}''': Means the purchase of {{euaprov|Allowances}} by {{euaprov|Receiving Party}} under the procedures described in paragraph (2) of the definition of {{euaprov|Receiving Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br>

'''{{euaprov|Buy-In Period}}''' is defined inthe definition of {{euaprov|Receiving Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}'').<br>

'''{{euaprov|Calculation Agent}}''' will be specified in the {{isdaprov|Confirmation}}. <br>

'''{{euaprov|Central Administrator}}''': Means the person designated by the EU Commission to operate and maintain the {{euaprov|EUTL}} under Article 20(1) of the {{euaprov|Directive}}. <br>

'''{{euaprov|Central European Time}}''': Means Central European Time, including Central European Winter Time and Central European Summer Time.<br>

'''{{euaprov|Close-out Cost of Carry Amount}}''': Means an amount in EUR equal to: (a) the {{euaprov|Close-out Cost of Carry Rate}}; multiplied by: (b)(i) for an {{euaprov|Allowance Forward Transaction}}, the {{euaprov|Allowance Purchase Price}}; or (ii) for an {{euaprov|Allowance Option Transaction}}, the {{euaprov|Allowance Strike Price}}; multiplied by: (c) the {{euaprov|Close-out Cost of Carry Delay}}, divided by (d) 360.

'''{{euaprov|Close-out Cost of Carry Delay}}''': Means the number of days in the period from (and including) the scheduled {{euaprov|Payment Date}} until the date that would be the {{euaprov|Payment Date}} if delivery had been made on the {{euaprov|Final Delivery Date}} or {{euaprov|Final Compliance Date}} (as the case may be). <br>

 

 

'''{{euaprov|Cost of Carry Delay}}''': Means the number of days in the period from (and including) the scheduled {{euaprov|Payment Date}} until the {{euaprov|Delayed Payment Date}}. <br>

'''{{euaprov|Deadline Shortfall}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}'').<br>

'''{{euaprov|Delivering Party}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} that is:  

'''{{euaprov|Delivering Party’s Delivery Business Day Location}}''': Means the place specified as such in the {{euaprov|Confirmation}} for the relevant {{euaprov|EU Emissions Allowance Transaction}} or, if a place is not so specified:  

:(i) the place specified as the {{euaprov|Delivery Business Day Location}} for Delivering Party; or  

 

 

'''{{euaprov|Delivery Business Day}}''': Means any day, which is not a Saturday or Sunday, on which commercial banks are open for general business in both {{euaprov|Delivering Party’s Delivery Business Day Location}} and the {{euaprov|Receiving Party’s Delivery Business Day Location}}. <br>

'''{{euaprov|Delivery Date}}''': Means the date or dates specified as such in the related {{isdaprov|Confirmation}} (subject to any adjustment under Part {{euaprov|(d)(i)(5)}} (''{{euaprov|Suspension Event}}'')). <br>

'''{{euaprov|DPRC Shortfall}}''' is defined inthe definition of {{euaprov|Delivering Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br>

 

 

'''{{euaprov|EEP Non-delivery}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}''). <br>

'''{{euaprov|EEP Payment}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}''). <br>

'''{{euaprov|EEP Risk Period}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} and any {{euaprov|Delivery Date}}, a period of time prior to the first succeeding {{euaprov|Reconciliation Deadline}}. <br>

'''{{euaprov|Encumbrance Loss Amount}}''': An amount reasonably determined by {{euaprov|Receiving Party}} [[in good faith]] to be its total losses and costs in connection with an {{euaprov|EU Emissions Allowance Transaction}} including, but not limited to, any loss of bargain, cost of funding or, at the election of {{euaprov|Receiving Party}} but without duplication, loss or costs incurred because of its terminating, liquidating, obtaining or re-establishing any hedge or related trading position. Such amount includes losses and costs for any payment already made under an {{euaprov|EU Emissions Allowance Transaction}} prior to the delivery of the written notice by {{euaprov|Receiving Party}} and {{euaprov|Receiving Party}}’s legal fees and out-of-pocket expenses but does not include {{euaprov|Excess Emissions Penalty}} or any amount which {{euaprov|Receiving Party}} must pay to a third party for any such penalty payable to any other party (or {{euaprov|Relevant Authority}}) by that third party. The parties agree that in circumstances where there was a breach of the {{euaprov|No Encumbrances Obligation}} by {{euaprov|Delivering Party}} caused by the transfer of an {{euaprov|Affected Allowance}}, {{euaprov|Receiving Party}} shall be entitled to include in such amount any losses arising out of or in connection with any claim, demand, action or proceeding brought against {{euaprov|Receiving Party}} by a third party consequent upon the transfer by {{euaprov|Receiving Party}} of an {{euaprov|Affected Allowance}} transferred to it by {{euaprov|Delivering Party}} under an {{euaprov|EU Emissions Allowance Transaction}}. <br>

'''{{euaprov|End of Phase Reconciliation Deadline}}''': Means the {{euaprov|Reconciliation Deadline}} scheduled to fall in April 2031. <br>

'''{{euaprov|EU Allowance}}''': Means an allowance, other than an {{euaprov|AEUA}} or {{euaprov|AEU Allowance}}, created under the {{euaprov|Directive}}, including allowances stemming from emission trading systems that are linked with the {{euaprov|EU ETS}} under Article 25 of the {{euaprov|Directive}}. <br>

'''{{euaprov|Expiration Date}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, the date specified as such in the related {{isdaprov|Confirmation}} (or determined under a method specified for such purpose) or, if that date is not a {{euaprov|Business Day}}, the next following day that is a {{euaprov|Business Day}}. <br>

'''{{euaprov|Fourth Compliance Period}}''': Means the period starting 1 January 2021 to 31 December 2030. <br>

'''{{euaprov|Holding Account}}''': Means a form of digital record maintained in a {{euaprov|Registry}} (under and under the {{euaprov|Registries Regulation}}) that is able to be used to record the allocation (if applicable), holding and transfer of {{euaprov|Allowances}} of the {{euaprov|Allowance Type}} that is to be delivered under the relevant {{euaprov|EU Emissions Allowance Transaction}} under and under the {{euaprov|Scheme}}. <br>

'''{{euaprov|Indemnifiable EEP}}'''is defined in {{euaprov|(d)(xi)}} (''{{euaprov|Failure to Deliver (Alternative Method) – EEP Applicable}}''). <br>

'''{{euaprov|Long-Stop Date}}''': Means, for a {{euaprov|Suspension Event}} that occurs with respect to a delivery or acceptance obligation that would otherwise be required to be performed within the period:

'''{{euaprov|Multiple Exercise}}''': Means:  

:(1) If “{{euaprov|Multiple Exercise}}” applies to an American {{euaprov|Allowance Option Transaction}} or a Bermuda {{euaprov|Allowance Option Transaction}}, {{euaprov|Buyer}} may exercise all or less than all the unexercised Options on any Business Days during the Exercise Period but (except as set forth below) on any such Business Day may not exercise less than the {{euaprov|Minimum Number of Options}} or more than the {{euaprov|Maximum Number of Options}} and, if a number is specified as “Integral Multiple” in the related {{isdaprov|Confirmation}}, the number of exercised Options must be equal to, or be an integral multiple of, the number so specified. Except as set forth below, any attempt to exercise on any such {{euaprov|Business Day}}:  

:(2) Notwithstanding the foregoing, on any such Business Day, Buyer may exercise any number of Options that does not exceed the {{euaprov|Maximum Number of Options}} if it exercises all the Options remaining unexercised. On the Expiration Date, Buyer may exercise any number of Options remaining unexercised.  

:(3) “'''{{euaprov|Minimum Number of Options}}'''” means, for an {{euaprov|Allowance Option Transaction}} to which {{euaprov|Multiple Exercise}} is applicable, the number specified as such in the related Confirmation.  

:(4) “'''{{euaprov|Maximum Number of Options}}'''” means, for an {{euaprov|Allowance Option Transaction}} to which {{euaprov|Multiple Exercise}} is applicable, the number specified as such in the related Confirmation. <br>

'''{{euaprov|National Administrator}}''': Means the entity responsible for managing, on behalf of a {{euaprov|Member State}}, a set of user accounts under the jurisdiction of a {{euaprov|Member State}} in the {{euaprov|Union Registry}} as designated under Article 8 of the {{euaprov|Registries Regulation}}. <br>

'''{{euaprov|No Encumbrance Obligation}}'''is defined in {{euaprov|(d)(vii)}} (''{{euaprov|No Encumbrances}}''). <br>

'''{{euaprov|Notice of Exercise}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, an Option notice given by {{euaprov|Buyer}} to {{euaprov|Seller}} (which may be given orally (including by telephone) unless the parties specify otherwise in the related {{isdaprov|Confirmation}}) of its exercise of the right or rights granted under the {{euaprov|Allowance Option Transaction}} on a {{euaprov|Seller Business Day}} during the {{euaprov|Exercise Period}}, which shall be irrevocable once effective. If the {{euaprov|Notice of Exercise}} is received on any {{euaprov|Seller Business Day}} after the latest time so specified, the {{euaprov|Notice of Exercise}} will be deemed to have been received on the next following {{euaprov|Seller Business Day}}, if any, in the {{euaprov|Exercise Period}}. {{euaprov|Buyer}} may exercise the right or rights granted under the {{euaprov|Allowance Option Transaction}} only by giving a {{euaprov|Notice of Exercise}}. <br>

'''{{euaprov|Number of Allowances}}''': Means the number specified as such in the related {{euaprov|Confirmation}}. <br>

'''{{euaprov|Number of Options}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, the number specified as such in the related {{isdaprov|Confirmation}}, being the number of Options comprised in the relevant {{euaprov|Allowance Option Transaction}}. <br>

'''{{euaprov|Option}}''': Means, for an {{euaprov|Allowance Option Transaction}}, each unit into which the Option Transaction is divided for purposes of exercise or settlement. <br>

'''{{euaprov|Option Entitlement}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, the number of {{euaprov|Allowances}} per Option specified as such in the related {{isdaprov|Confirmation}}. If no {{euaprov|Option Entitlement}} is specified, the {{euaprov|Option Entitlement}} for any {{euaprov|Allowance Option Transaction}} shall be one {{euaprov|Allowance}} per Option. <br>

'''{{euaprov|Payment Date}}''': Means the date specified as such or otherwise determined under a method specified, provided that, for delayed delivery under Part(d)(i)(5)({{euaprov|Suspension Event}}), the {{euaprov|Payment Date}} shall be determined accordingly from the {{euaprov|Delayed Delivery Date}} (such Payment Date being the “'''{{euaprov|Delayed Payment Date}}'''”).<br>

'''{{euaprov|Potential Exercise Date}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is a Bermuda {{euaprov|Allowance Option Transaction}}, each date specified as such in the related Confirmation or, if that date is not a Business Day, the next following day that is a {{euaprov|Business Day}}.<br>

'''{{euaprov|Premium}}''' will be specified in the Confirmation. If a {{euaprov|Premium}} per {{euaprov|Allowance}} is specified, the {{euaprov|Premium}} shall be the product of the {{euaprov|Premium}} per {{euaprov|Allowance}}, the {{euaprov|Number of Options}} and the {{euaprov|Option Entitlement}}. <br>

'''{{euaprov|Put}}''': Means a type of {{euaprov|Allowance Option Transaction}} entitling the {{euaprov|Buyer}} to sell {{euaprov|Allowances}} to {{euaprov|Seller}} at the {{euaprov|Allowance Strike Price}} per {{euaprov|Allowance}}. <br>

'''{{euaprov|Receiving Party}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} that is:  

'''{{euaprov|Receiving Party’s Delivery Business Day Location}}''': Means the place specified as such in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} or, if a place is not so specified:  

:(i) the place specified as the {{euaprov|Delivery Business Day Location}} for {{euaprov|Receiving Party}}; or  

 

 

'''{{euaprov|Reconciliation Deadline}}''': Means 30th April in each calendar year for the preceding calendar year or such later date in each year as may be determined under the {{euaprov|Scheme}} for the surrender of {{euaprov|Allowances}} under the {{euaprov|Scheme}}. <br>

'''{{euaprov|Registries Regulation}}''': Means the Commission Regulation (EU) no. 389/2013 of 2 May 2013 establishing a {{euaprov|Union Registry}} under the {{euaprov|Directive}} 2003/87/EC of the European Parliament and of the Council, Decisions No.280/2004/EC and No. 406/2009/EC of the European Parliament and of the Council and repealing Commission Regulation (EU) No. 920/2010 and No. 1193/2011, as amended from time to time. <br>

'''{{euaprov|Registry}}''': Means the registry established by a Member State, a non-Member State or the EU, under the {{euaprov|International Rules}}, in order to ensure the accurate accounting of the issue, holding, transfer, acquisition, surrender, cancellation and replacement of {{euaprov|Allowances}}. <br>

:(b) the establishment of and continuing functioning of the {{euaprov|EUTL}}; or

'''{{euaprov|Relevant Authority}}''': Means any authority having power under the {{euaprov|Directive}} or the {{euaprov|Registries Regulation}} to administer the {{euaprov|Scheme}}, including the {{euaprov|Central Administrator}} and each {{euaprov|National Administrator}} as those terms are defined in the {{euaprov|Registries Regulation}}. <br>

'''{{euaprov|Relevant Registry}}''': Means the {{euaprov|Registry}} through which a party is obliged to perform a delivery or acceptance obligation under an {{euaprov|EU Emissions Allowance Transaction}}. Where a party has specified more than one {{euaprov|Specified Holding Account}} for delivery or acceptance purposes, the {{euaprov|Relevant Registry}} shall be identified under Part {{euaprov|(d)(i)(2)}}(C). <br>

'''{{euaprov|RPRC Shortfall}}''' is defined inthe definition of {{euaprov|Receiving Party’s Replacement Cost}} in this Annex {{euaprov|(e)}} (''{{euaprov|Defined Terms and Interpretation}}''). <br>

 

 

'''{{euaprov|Seller}}''' will be specified in the {{isdaprov|Confirmation}}. <br>

'''{{euaprov|Seller Business Day}}''': Means, for an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, any day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in the city in which Seller is located for purposes of receiving notices. <br>

 

 

 

 

 

'''{{euaprov|Specified Holding Account}}''': Means, for a party and an {{euaprov|EU Emissions Allowance Transaction}}, the {{euaprov|Holding Account}}s (if any) specified as such for such party (i) in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}; or (ii) where no such accounts are specified under (i), in the Annex to this Annex; in either case under Part {{euaprov|(d)(xii)}}(1)(A) or Part {{euaprov|(d)(xii)}}(2)(A) and subject to modification under Part {{euaprov|(d)(xii)}}(1)(B) and Part {{euaprov|(d)(xii)}}(2)(B). <br>

 

'''{{euaprov|Trade Date}}''':will be specified in the {{isdaprov|Confirmation}}. <br>

'''{{euaprov|Third Compliance Period}}''': Means the period referred to in Article 16 of the {{euaprov|Directive}} 2009/29/EC starting 1 January 2013 to 31 December 2020. <br>

'''{{euaprov|Undelivered Allowances}}''' is defined in {{euaprov|Receiving Party’s Replacement Cost}}. <br>

'''{{euaprov|VAT}}'''is defined in {{euaprov|(d)(viii)}} (''{{euaprov|Value Added Taxes}}''). <br>

'''{{euaprov|VAT Amount}}'''is defined in {{euaprov|(d)(viii)}} (''{{euaprov|Value Added Taxes}}''). <br>

'''{{euaprov|VAT Invoice}}'''is defined in {{euaprov|(d)(viii)}} (''{{euaprov|Value Added Taxes}}''). <br>

'''{{euaprov|VAT Jurisdiction}}''': Means, for a party and an {{euaprov|EU Emissions Allowance Transaction}}, the place specified as such in the related {{isdaprov|Confirmation}} or, if a place is not so specified, the specified {{euaprov|VAT Jurisdiction}} for such party. <br>

'''{{euaprov|Written Confirmation}}''': Means, for a party and an {{euaprov|EU Emissions Allowance Transaction}} which is an {{euaprov|Allowance Option Transaction}}, if “{{euaprov|Written Confirmation}}” applies or if demanded by {{euaprov|Seller}} (which demand, notwithstanding any provisions regarding notice applicable to the {{euaprov|Allowance Option Transaction}}, may be given orally (including by telephone)), {{euaprov|Buyer}} shall execute a written confirmation (including by facsimile transmission) confirming the substance of the {{euaprov|Notice of Exercise}} and deliver the same to {{euaprov|Seller}}. {{euaprov|Buyer}} shall cause such executed written confirmation to be received by {{euaprov|Seller}} within one {{euaprov|Seller Business Day}} following the date that the {{euaprov|Notice of Exercise}} or {{euaprov|Seller}}’s demand, as the case may be, becomes effective. <br>