Under the Market Rules Market participants are required to provide security in certain circumstances. Credit Support is required to provide Prudential Support for the operational exposure of Market Participants to the market, while Reserve Capacity Security is required for projects that have been assigned Capacity Credits and which are in development or under construction.
Many types of Credit Support are available, but all Credit Support must be provided using the forms provided by the IMO which are detailed below. Credit Support, other than Security Deposits, must be supplied by an organisation that meets the Acceptable Credit Criteria described below.
Acceptable Credit Providers
All providers of Prudential Support must meet the Acceptable Credit Criteria detailed in Market Rule 2.38.6. The IMO has compiled a list of organisations that meet the criteria, which can be found below.
Forms for Lodgement of Credit Support
Forms for the lodgement of Credit Support, including Bank Undertakings and Security Deposits, can be found here.
Participants may provide prudential support in the form of Security Deposits.
Security Deposits - Lodgement
This document details instructions for lodging a Security Deposit for Prudential Support as detailed in the Prudential Requirements Procedure which can be found here.
Security Deposits - Investment Policy
Under clause 2.38.5 and 4.13.6 of the Market Rules the IMO must pay the Market Participant or the Network Operator, as applicable, the interest accumulated on the deposit less any liabilities and expenses incurred by the IMO, including bank fees and charges. The Investment Policy for security deposits is documented below.
Registration of Security Interests for Security Deposits
Details of how the IMO will register its security interests on the Personal Property Securities Register can be found here.