Today, the Warsaw Commodity Clearing House (IRGiT) has obtained from the Polish Financial Supervision Commission (KNF) the license to operate a clearing house and a settlement house. This license authorizes clearing and settlement of transaction on financial instruments, concluded on the regulated exchange market and OTC transactions. IRGiT is the first company in Poland to have obtained such a license.

Thanks to this license, IRGiT will be able to start clearing transactions concluded on the POPLX S.A. market and in the future, to extend the scope of its activities to other exchanges and OTC transactions. IRGiT will be the first Central Counterparty-type clearing house in Eastern Europe, taking full responsibility for execution of transactions.

The existence of a quotation system and a clearing-settlement house that are efficient, validated and known to the energy market, operating in a transparent way and in compliance with international standards and EU regulations (the MiFID directive) is undoubtedly a solid base for further development of the electricity market and of the financial derivatives related to his market, with potential for future development to other commodity markets - said Ireneusz Łazor, CEO of the Warsaw Commodity Clearing House.

The instruments, which may be subject of trading on the broadly understood energy market can be divided into two categories. The first group includes exchange commodities, including (in compliance with the Commodity Exchange legislation) electrical power, as well as property rights resulting from the Certificates of Origin, as described in the Energy Law legislation. This group also includes property rights, which are not classified as financial instruments and whose price depends on the price of specific types of energy (e.g. forward contracts). The second group includes financial instruments, whose price depends on the price of exchange commodities and the trading and clearing of those instruments is realized in compliance with the Financial Instruments Trading legislation.

An important element of introduction of derivative transactions into trading is the possibility to use them as part of long-term pricing of power plants in the process of ownership restructuring. It seems that at the current stage of privatization of the power sector and expected new investments in that domain, derivatives may play a significant role in planning those processe. - adds Grzegorz Onichimowski, CEO of POLPX. S.A.

Introduction of futures to the Polish Power Exchange, as complement to the forward electricity contracts will enhance cost management processes in the power sector companies. A derivative contract may not only be used as a guarantee for future delivery of a specified amount of energy, at a pre-defined price, but also as an instrument to secure prices of energy, without the obligation to buy.

A derivative contract may serve the producers, who want to avoid situations, where for future power deliveries, they would receive a payment different from the amount used as basis in planning their business operations or support energy recipients in preparing projections of electrical power procurement costs.

IRGiT will also play a significant role in the project covering establishment of a regional energy market in collaboration with the Nord Pool exchange, by representing the POLPX members in clearing of this market and management of the exchange rate risks.

IRGiT is planning to take over clearing of all markets managed by POLPX on 17 May, 2010.