ESMA
Implementation Question
Duration (2.126)
There is no clear understanding on the definition of ‘Duration’ for the reporting of commodity contracts. A trade can have a series of Delivery Start and End dates – delivery blocks – and firms are unclear whether ‘Duration’ should represent each of these delivery blocks or represent the contact as a whole. For example, in a contract with three monthly delivery blocks of one month each, is ‘Duration’ 1 month or 3 months?
The EMIR technical standards specify Duration as “the duration of the delivery period” which suggests each delivery block. However, ACER’s guidance for REMIT reporting has Duration relating to the full length of the contract:
“This field identifies the duration of the delivery period. This is a generic representation of the contract, i.e. it does not specify the exact dates and times of the contract, but the common usage terms of the delivery period. For example, it refers to the contract as a month contract or any other duration as specified in the table reported above without specifying the exact start and end date and time of a month contract.
This field does not provide the exact duration of the contract, as this should be deducted from the Load delivery intervals, Delivery Start Date and Delivery End Date fields, except for quarterly, seasonal and annual contracts. For example, if a contract has one hour of delivery on a daily basis for one month, field Duration should be populated with ‘M’ (Month). If a contract has a delivery in one day for 15 minutes, field Duration should be populated with ‘N’ (Minutes). The indication ‘N’ will not distinguish between 15 and 30 minutes delivery, as these will have to be distinguished via the Load delivery intervals field.”
The second paragraph above refers to delivery being on a daily basis for one month, and Duration would be reported as ‘M’, i.e. the duration of the contract not the delivery blocks
We would appreciate it if ESMA can give guidance on how to define the field ‘Duration’ and how it is to be reported.
Response:
Duration is part of the fields repeatable for each delivery period, i.e. it should describe the given delivery period (in line with the RTS definition).
Having said that, the rest of ACER guidance can also be applied on that basis, i.e. for a 1-month long delivery period with one hour delivery on a daily basis, the duration would be 'month'; for a 1-day delivery period with a 15 minutes delivery, the duration would be 'minutes' etc.