Template:M summ EUA Annex Adjustment Event

JC’s guide to Adjustment Events in various Allowance disruption scenarios

Event	What it is	Who does what	Who bears loss
Abandonment of Scheme	EU gives up on Emissions Trading	Either party terminates on notice. Repay any prepaid Forward Purchase consideration or Option premia.	Walk away (I know, I know, it makes no sense. Don’t @ me folks)
Settlement Disruption Event	External Force Majeure type event prevents settlement.	Settlement suspended. No Cost of Carry Amount payment. If continues for 9 Delivery Business Days or runs over a Reconciliation Deadline either party can designate Illegality, terminate the trade and either pay the Close-out Amount or cancel and walk away.	Unless you specified Payment on Termination for Settlement Disruption, just walk away. (Don’t @ me).
Suspension Event	Registry suspends operating or there is an Administrator Event.	Receiving Party pays Cost of Carry Amount.	Note: Suspension Events trump Settlement Disruption Events. Unless you specified Payment on Termination for Suspension, just walk away. (Don’t @ me).
Fungibility Event	Phase 3 Allowances not exchangeable for Phase 4 Allowances or no longer fungible.	Dunno but is isn’t a Settlement Disruption Event	You will have to agree this among yourselves.