Commercial market-making approach

The Authority reviewed market-making arrangements in the New Zealand futures market throughout 2020. We are now pursuing an approach that further secures the benefits of the current arrangements while enhancing efficiency and improving trust and confidence in the market.

A commercial market-making approach will build on the current arrangements, where market-making is provided by the four largest physical participants in the New Zealand electricity market.

The Authority wants to establish an efficient commercial market-making scheme through the initial appointment of one or more commercial market-makers to provide market-making services along with the existing set of market-makers. Commercial providers can be based locally or internationally and will be paid a fee for providing market making services. The fee will be determined via a competitive tender.

Decision to pursue commercial market-making

On 19 January the Authority initiated a Request for Information (RFI) to help inform key decisions regarding establishment of a commercial market-making scheme for New Zealand Electricity Futures contracts. The RFI closed on 19 March 2021. The Authority appreciates the effort that respondents made in contributing to the RFI.

Media release - Services contract opportunity for providers of market-making services to support the New Zealand wholesale electricity futures market

The Authority has consulted on changes to the Electricity Industry Levy to support the implementation of a commercial market-making scheme. The consultation closed on 22 June 2021. 

The Authority is now undertaking two further stages of procurement consisting of:

  • an open Registration of Interest to identify a shortlist of potential commercial scheme service providers; followed by
  • a closed Request for Proposal to shortlisted respondents with the objective of appointing one or more service providers to provide commercial market making services under the commercial scheme.

The Registration of Interest closed on Friday 24 September 2021. The ROI requested information from interested parties that will allow the Authority to shortlist potential suppliers.

Shortlisted suppliers will then be invited to progress to the second stage of procurement, the Request for Proposal.

For more information please email commercialmarketmaking@ea.govt.nz.

Registration of Interest – CLOSED

Request for Information – CLOSED