Commission Delegated Regulation (EU) 2023/2830 of 17 October 2023 supplementing Directive 2003/87/EC of the European Parliament and of the Council by laying down rules on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances

COMMISSION DELEGATED REGULATION (EU) 2023/2830 of 17 October 2023 supplementing Directive 2003/87/EC of the European Parliament and of the Council by laying down rules on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances (Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (1), and in particular Article 3d(3) and Article 10(4) thereof,

Whereas:

(1) Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the union (EU ETS) was revised and amended by Directive (EU) 2023/959 of the European Parliament and of the Council (2) to align it with Regulation (EU) 2021/1119 of the European Parliament and of the Council (3) setting a target of at least 55 % net emission reductions by 2030 compared to 1990.

(2) Since 2012, emission allowances have been auctioned in accordance with Commission Regulation (EU) No 1031/2010 (4) providing for rules on the timing, administration and other aspects of the auctioning of allowances under Directive 2003/87/EC, ensuring that the auctioning of allowances is conducted in an open, transparent, harmonised and non-discriminatory manner through a well-functioning process.

(3) Regulation (EU) No 1031/2010 needs to be changed to take account of the new rules and elements introduced in Directive 2003/87/EC, including the extension of the scope of the existing emission trading system to maritime transport and the introduction of a new and separate emissions trading system for buildings, road transport and industrial activities not covered by the existing emission trading system. It is also necessary to address changes in the auctioning of allowances for the Recovery and Resilience Facility (5) and the Social Climate Fund (6) introduced by Article 10e, Article 10a(8b) and Article 30d(3) and 30d(4) of Directive 2003/87/EC, as well as changes in the functioning of the Innovation Fund pursuant to Article 10a(8) of that Directive. In addition, it is appropriate to clarify and fine-tune existing provisions in Regulation (EU) No 1031/2010, based on the lessons learned from its implementation.

(4) The extent of the necessary changes to the current rules requires that a new regulation is adopted. Regulation (EU) No 1031/2010 should therefore be repealed.

(5) Article 10(4) of Directive 2003/87/EC lays down the principles for the auctioning of allowances. The auctioning should be predictable, in particular as regards the timing and sequencing of auctions and the estimated volumes of allowances to be made available. According to that Article, it is to be ensured that auctions are designed to ensure that small and medium-sized enterprises covered by the emissions trading system have full, fair and equitable access, that small emitters are granted access, that participants have access to information at the same time, that participants do not undermine the operation of the auctions, and that the organisation of and participation in the auctions is cost-efficient avoiding undue administrative costs.

(6) This Regulation should apply to the auctioning of all allowances covered by Directive 2003/87/EC.

(7) Article 10(1) of Directive 2003/87/EC requires Member States to auction allowances to stationary installations covered by Chapter III of that Directive not allocated free of charge. Thus, Member States must auction allowances not allocated free of charge. They may not use any other means of allocation, nor could they withhold or cancel allowances not allocated for free instead of auctioning them.

(8) From 2024, emissions from maritime transport will be included in the EU ETS. Directive 2003/87/EC provides that the rules on auctioning of allowances are to apply to maritime transport activities in the same manner as they apply to other activities covered by the EU ETS.

(9) The method for establishing the total quantity of allowances to be allocated for aviation, and the method for establishing the share of those allowances to be auctioned have been changed with a gradual phase out of free allocation for the aviation sector by 2026. Therefore, it is necessary to revise the specific rules to determine the volume to be auctioned each calendar year in respect to aviation in accordance with Directive 2003/87/EC.

(10) In Commission Delegated Regulation (EU) 2019/1122 (7), the definition of general allowances has been amended to include all allowances issued after 1 January 2025 pursuant to Chapter III of Directive 2003/87/EC, all allowances created for maritime transport activities pursuant to Article 3ga of that Directive and all allowances created for aviation activities pursuant to Article 3c and Article 3d of that Directive. It is therefore necessary to ensure that those allowances are jointly auctioned in the same bidding windows from 1 January 2025.

(11) From 2027, Directive 2003/87/EC provides for a separate emissions trading system for fuels used in buildings, road transport and additional sectors which correspond to industrial activities not covered by Annex I of Directive 2003/87/EC, such as the heating of industrial facilities. Specific rules need to be established for the auctioning of those allowances, in particular to ensure a smooth start of operations of the separate emission trading system.

(12) For reasons of simplicity and accessibility, allowances should be auctioned by way of a standardised electronic contract, made available for delivery within two trading days. Such short-term delivery deadlines limit any potential negative impact on competition between the auction platforms and trading places in the secondary market for allowances. Moreover, short-term delivery deadlines are simpler and encourage wide participation, thereby mitigating the risk of market abuse. They also ensure better accessibility for small and medium-sized enterprises covered by the system and for small emitters.

(13) To ensure fairness and cost-efficiency and to address the need to mitigate the risk of market abuse, auctions should be carried out by means of a single-round, sealed-bid and uniform-price format. Moreover, tied bids should be resolved by means of a random process, as this generates uncertainty for bidders who could potentially collude on the price.

(14) In view of legal certainty and transparency, this Regulation should contain detailed provisions on other aspects of auctioning such as lot size, the possibility to withdraw or modify submitted bids, the currency used for bidding and for payment, the submission and processing of applications for admission to bid, as well as any refusal, revocation or suspension of admission.

(15) The auction clearing price can be expected to be closely aligned to the prevailing secondary market price. Where an auction clearing price is significantly under the prevailing secondary market price, it is likely to indicate a deficiency of the auction. Allowing such an auction clearing price to prevail could distort the carbon price signal and disturb the carbon market and it would not ensure that bidders pay fair value for the allowances. Therefore, it is necessary to determine a reserve price on the basis of the prevailing secondary market price during the bidding window. Where the reserve price is not cleared, the auction should be cancelled. However, providing for cancellation of auctions should not be applicable for the start of an auctioning system when a sufficiently liquid secondary market is not yet established, which is the case for the new emissions trading system for fuels used in buildings, road transport and additional sectors. Therefore, it is necessary to derogate from the requirement to determine a reserve price for the initial period of auctions of allowances covered by Chapter IVa of Directive 2003/87/EC until a sufficiently liquid relevant secondary market is established.

(16) In order to safeguard the integrity of the auctions, an auction platform should be able to cancel an auction when that auction may be disrupted. To avoid the accumulation of volumes in case several auctions are cancelled, it should be possible to distribute the cancelled volumes evenly over subsequent auctions that do not already include cancelled volumes from previously cancelled auctions.

(17) A relatively high frequency of auctions is desirable in order to limit their impact on the functioning of the secondary market, whilst ensuring that auctions are large enough to attract sufficient participation. Such high frequency reduces the risk of market abuse, as it decreases the value at stake for bidders in individual auctions and increases their flexibility to make use of later auctions to adjust their trading positions. For those reasons, the frequency should be at least weekly. Given the much smaller volume of allowances in respect of aviation, the appropriate frequency for auctions for such allowances should be at least once every two months. However, to ensure a smooth start of the auctions of allowances covered by Chapter IVa of Directive 2003/87/EC, it is necessary to allow for less frequent auctions at the start of the system. If this flexibility is used, it will result in a higher volume of allowances for each auction, which might be necessary to meet the initial demand for allowances on the spot market before a sufficiently liquid secondary market is established.

(18) As a rule, the volume to be auctioned in each calendar year should be equal to the volume of allowances attributed to that year. The auction volume is to be established each year in accordance with the relevant provisions of Directive 2003/87/EC.

(19) The allowances for the aviation sector, the maritime sector and the sector of stationary installations should be auctioned together from 1 January 2025. In 2024, the allowances for the maritime sector and for stationary installations are to be auctioned together. As the new emission trading system for buildings, road transport and additional sectors is established as a separate system, its allowances are to be auctioned separately from the allowances for the aviation sector, the maritime sector and the sector of stationary installations.

(20) To provide predictability to the carbon market, it is necessary to establish clear rules and procedures for determining, well before the beginning of each calendar year, a detailed auction calendar, with all relevant information for each individual auction. Any subsequent changes to the auction calendar should only be possible in certain situations. Any adjustments should be made in a manner which affects the predictability of the carbon market the least and the revised calendars should be published, when possible, well in advance of the date when the revision takes effect.

(21) Open access is required to encourage participation and, thereby, ensure a competitive auction outcome. Equally, confidence in the integrity of the auction process, in particular vis-à-vis participants seeking to distort the auctions by using them as a vehicle for money laundering, terrorist financing, criminal activity or market abuse is a pre-requisite for ensuring auction participation and a competitive auction outcome. To ensure the integrity of the auctions, access to the auctions should be subject to minimum requirements with regard to adequate know-your-customer and eligibility checks. To ensure the cost-effectiveness of such checks, eligibility to apply for admission to the auctions should be given to easily identifiable, well-defined categories of participants, notably operators of stationary installations, aircraft operators, shipping companies and regulated entities covered by the emissions trading system, as well as regulated financial entities such as investment firms and credit institutions. Business groupings of such operators and regulated entities should also be eligible to apply for admission to bid in the auctions.

(22) Participants should be able to choose whether to access the auctions directly via the internet or dedicated connections, or through authorised and supervised financial intermediaries. For that purpose, they should be able to choose other persons authorised by the Member States to bid on their own account or on behalf of clients of their main business, where their main business is not the provision of investment or banking services, subject to such other persons complying with investor protection measures and customer due diligence measures equivalent to those applicable to investment firms.

(23) In order to ensure equal and transparent access to the auctions, it should not be possible to make admission to the auctions dependent on becoming a member of or a participant in the secondary market organised by the auction platform or any other trading place operated by the auction platform or by any third party. However, participants in the secondary market organised by an auction platform that are otherwise deemed eligible should be admitted to auctions without further admission requirements. An auction platform should refuse or revoke access to auctions in certain well-defined circumstances that may affect the integrity of the auctioning system.

(24) Each Member State should appoint an auctioneer, who is to be responsible for the auctioning of allowances on behalf of the appointing Member State. It should be possible for the same auctioneer to be appointed by more than one Member State. The auctioneer should be responsible for auctioning the allowances on the auction platform and for receiving and disbursing the auction proceeds. It is important that agreements between the Member States and their auctioneers are compatible with the agreements between the auctioneer and the auction platform, and in case of any conflict the agreements between the auctioneer and the auction platform should prevail.

(25) It is essential to ensure the integrity of the auctioneers. Therefore, when appointing the auctioneer, Member States should consider with priority candidates with the least risk of conflict of interest or market abuse having regard in particular to their activities on the secondary market, if any, and their internal processes and procedures to mitigate the risk of conflict of interest or market abuse, without affecting their ability to fulfil their tasks, in a timely manner, in accordance with the highest professional and quality standards. In order to comply with the rules against market abuse, Member States should be expressly prohibited from sharing any inside information regarding the auctions with their auctioneer. Contravention of that prohibition should be subject to effective, proportionate and dissuasive sanctions.

(26) Directive 2003/87/EC provides for the auctioning of allowances for the Innovation Fund to support innovation in low-carbon technologies, for the Modernisation Fund to improve energy efficiency and to modernise the energy systems of certain Member States, and for the Recovery and Resilience Facility to foster independence, security and sustainability of the Union’s energy supply. Those allowances should be auctioned on the auction platform appointed by the Commission and the Member States participating in the joint action to appoint that platform (‘common auction platform’) in accordance with the principles and modalities of the auctioning process. To this end, the European Investment Bank (EIB) should be the auctioneer for those funds without becoming part of the joint procurement procedure for the common auction platform. The relevant volumes of allowances should be auctioned at the same auctions as the volumes auctioned by the Member States participating in the joint action to procure the common auction platform.

(27) For the volume of allowances to be auctioned for the Innovation Fund and for the Recovery and Resilience Facility, it is necessary to take into account the objectives set by Directive 2003/87/EC for the respective funds, the resources available and the revenue already raised. In order to ensure transparency and predictability for market participants, a minimum annual volume to be auctioned for the Innovation Fund before any transfer to the Recovery and Resilience Facility should be established. Since Directive 2003/87/EC establishes for the Recovery and Resilience Facility overall auction revenue targets, initial annual volumes to be auctioned for that facility should also be established. It is also necessary to establish a procedure for revising the auction volumes in case the auction revenues are considered insufficient to meet the revenue target set in Directive 2003/87/EC. In case the auction volumes are not sufficient, it should be possible to adjust the auction calendars to schedule additional volumes to be auctioned for the Recovery and Resilience Facility. If the targeted auction revenue is accumulated earlier, the auctioning of allowances for the Recovery and Resilience Facility should be suspended in accordance with the relevant provisions of Delegated Regulation (EU) 2019/1122, and the auction calendar should be revised in due course.

(28) A Social Climate Fund established by Regulation (EU) 2023/955 of the European Parliament and of the Council (8) will provide dedicated funding to Member States to support the most affected vulnerable groups, especially households in energy or transport poverty affected by the inclusion of the emission from the fuels used in the buildings and road transport sector in Directive 2003/87/EC. The Social Climate Fund will be funded from the auctioning of allowances from the existing EU ETS and of allowances from the new emissions trading for the buildings, road transport and additional sectors.

(29) To ensure transparency and predictability for market participants, initial annual volumes to be auctioned for the Social Climate Fund in 2027 should be established. Initial annual auction volumes should not be established for the period 2028-2032 in view of the commitment taken to incorporate the Social Climate Fund in the Union budget from the post-2027 Multi-annual Financial Framework. For reasons of efficiency, the Commission should serve as auctioneer for the allowances to be auctioned for the Social Climate Fund. To ensure that sufficient revenue is raised from the auctioning of allowances to meet the annual amount to be allocated to the Social Climate Fund, the annual volumes of allowances under Article 30d(3) and 30d(4) of Directive 2003/87/EC to be auctioned for the Social Climate Fund should be distributed between January and August of each year. Since Directive 2003/87/EC determines auction revenues targets for the Social Climate Fund, it is necessary to establish a procedure for revising the auction volumes where the targeted auction revenues are reached before the set period or where they are insufficient. The auction calendar should be revised to include additional allowances to be auctioned between September to December in the case of a shortfall of revenue. If the targeted auction revenue is accumulated earlier, the auctioning of allowances for the Social Climate Fund should be suspended in accordance with Delegated Regulation (EU) 2019/1122 and the auction calendar should be revised.

(30) Article 12(4) of Directive 2003/87/EC provides the possibility for, and strongly encourages Member States to cancel allowances from their auction volumes in the event of closure of electricity generation capacity in their territory, for which a notification procedure is to be established by this Regulation. The Member State concerned should notify the Commission of its intention to cancel allowances using a uniform template providing evidence and information about the closed installation, the maximum volume to be cancelled and the timing of the cancellation, as well as a methodology for determining the exact volumes to be cancelled annually. This should be communicated annually no later than 31 May of the second year after the notification of the intent to cancel the allowances. To preserve the functioning of the market stability reserve established by Decision (EU) 2015/1814 of the European Parliament and of the Council (9), the volume of the cancellation should be deducted from the auction volumes of the Member State only after the adjustments for the market stability reserve have been made for the respective year. If the volume to be cancelled does not exceed 5 million allowances, the volume of the cancellation should be deducted from the allowances to be auctioned by the relevant Member State between September and December of that year. If the volume to be auctioned exceeds 5 million allowances, the volume of the cancellation should be deducted over a period of 12 months starting from September to minimise the impact of that cancellation on the market. To ensure transparency, the Commission should publish the information provided by the Member States in accordance with the template, except where that information is protected for reasons of confidentiality.

(31) A common auctioning infrastructure where a common auction platform conducts the auctions based on harmonised rules for the auctioning of the different type of emission allowances best achieves the overarching objectives of Directive 2003/87/EC. Such an approach is the most cost-effective means of auctioning allowances without an undue administrative burden that would necessarily ensue from using multiple auctioning infrastructures. It best provides for open, transparent and non-discriminatory access to the auctions, both de jure and de facto. Such a common approach would ensure the predictability of the auction calendar and best strengthens the clarity of the carbon price signal. A common auctioning infrastructure is particularly important for providing equitable access to small and medium-sized enterprises covered by the emissions trading system and to small emitters. A common auction platform facilitates the widest participation from across the Union and, thereby, best mitigates the risk of participants undermining the auctions by using them as a vehicle for money laundering, terrorist financing, criminal activity or market abuse.

(32) The conduct of the auctions, the establishment and management of the auction calendar and various other tasks relating to the auctions, such as maintaining an up-to-date website accessible throughout the Union, require joint action by the Member States and the Commission. The need for such joint action is derived from the Union-wide ambit of the emissions trading systems, the overarching policy objectives of Directive 2003/87/EC, and the fact that the Commission is directly responsible under that Directive for the detailed implementation of a number of features of the emissions trading system. Therefore, the competitive procurement process for the appointment of the common auction platform should be carried out through a joint procurement by the Commission and the Member States, within the meaning of Article 165(2) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (10).

(33) The specific procedures to be followed for the procurement of the common auction platform should be specified in an agreement between the Commission and Member States, in which the practical modalities for the evaluation of the requests for participation, for the tenders and for the award of the contract, as well as the law applicable to the contract and the competent court for hearing disputes, should be set out as required by Article 165(2) of Regulation (EU, Euratom) 2018/1046.

(34) To mitigate any risk of reduced competition in the carbon market, it should be possible for Member States to opt-out of the common auction platform by appointing their own auction platforms (‘opt-out auction platforms’). Appointed opt-out platforms should be listed by the Commission in in Annex III to this Regulation. Such listing should be based on a notification of the opt-out platform by the appointing Member State to the Commission and an assessment by the Commission.

(35) Competition between different potential auction platforms should be ensured by the competitive procurement process for the appointment of the auction platform where required by either Union or national procurement law. The auction platform should be connected to at least one clearing system or settlement system. Opt-out auction platforms should be appointed for a limited period of maximum 3 years, renewable for another 2 years during which the arrangements governing all auction platforms should be reviewed. Providing for a period of 3 years for the opt-out auction platform is designed to ensure a minimum term of appointment for the opt-out platform whilst allowing the appointing Member State to join the common platform if it chooses to do so after the 3 year period has elapsed, without prejudice to the ability of the appointing Member State to renew the appointment of the opt-out platform for a further 2 years pending the outcome of the review by the Commission. Upon expiry of each appointment period, there should be a new competitive procurement process where a procurement process is required by either Union or national procurement law.

(36) To simplify the reappointment of opt-out platforms, listing under this Regulation should only be required for new entities or for re-listing of an entity under changed conditions. Thus, in case the same opt-out platform is appointed by a Member State under the same conditions, its listing should be prolonged under the same terms and conditions as the initial listing. That prolongation should be subject to a confirmation from the Member State and the Commission that the requirements of this Regulation and the objectives of Article 10(4) of Directive 2003/87/EC are satisfied.

(37) Subject to any applicable Union or national public procurement rules, including those concerning the avoidance of conflicts of interest and maintaining confidentiality, it should be possible to grant Member States not participating in the joint action to procure the common auction platform observer status in whole or in part in the joint procurement process upon terms and conditions agreed between the Member States participating in the joint action and the Commission in the joint procurement agreement. Such access will facilitate convergence between the opt-out auction platforms and the common auction platform with respect to aspects of the auction process that are not fully harmonised.

(38) In view of ensuring a smooth start of auctions for the new emissions trading system for buildings, road transport and additional sectors, established under Chapter IVa of Directive 2003/87/EC, and facilitating the coordination and integration with the auction platforms for the existing EU ETS, the possibility to opt-out from the common auction platform should not apply for the auctioning of such allowances for buildings, road transport and additional sectors.

(39) In view of the possibility of having multiple opt-out auction platforms appointed by different Member States, as well as a common auction platform, it is necessary to establish in detail the tasks of and the services to be provided by the auction platforms, such as providing access to and conducting auctions, managing auction calendars, publishing and notifying the auction results, as well as providing to the Commission and the competent authorities any information necessary for safeguarding the integrity of the auctioning system and the carbon market. In order to ensure smooth transition between incumbent and newly appointed auction platforms, all auction platforms should also determine an exit strategy.

(40) In order to make use of the organisational infrastructure available on the secondary market for the administration of the auctions, it is necessary to require that an auction platform is a regulated market. In particular, regulated markets are bound under Directive 2014/65/EU of the European Parliament and of the Council (11) and under Regulation (EU) No 596/2014 of the European Parliament and of the Council (12) on market abuse, to provide a number of safeguards in the conduct of their operations. The requirement that the auction platform is a regulated market has various advantages. It allows relying on the organisational infrastructure, experience, capabilities, and transparent mandatory operational rules of the market. This is relevant, inter alia, with regard to the clearing or settlement of transactions, as well as monitoring compliance with the market’s own rules and with other legal obligations such as the prohibition of market abuse and the provision of extra-judicial dispute settlement mechanisms. This is cost-effective and helps safeguard the operational integrity of the auctions. The conflict-of-interest rules of regulated markets laid down in Regulation (EU) No 596/2014 require the auctioneer to be independent of the auction platform, its owners or its market operator so as not to undermine the sound functioning of the regulated market. Moreover, many potential participants in the auctions will already be either members of, or participants in, the various regulated markets active on the secondary market.

(41) Since 2018, allowances are classified as financial instruments by Directive 2014/65/EU. Previously, only derivatives of allowances were as financial instruments. That classification brings the secondary market spot trade in allowances within the scope of, inter alia, Directive 2014/65/EU, Regulation (EU) No 596/2014 and Regulation (EU) No 600/2014 of the European Parliament and of the Council (13). However, the process of auctioning of allowances (primary market) is only covered by Regulation (EU) No 596/2014.

(42) In order to further enhance the integrity and transparency of the European carbon market and to improve regulatory reporting and market monitoring in the market of emission allowances and derivatives thereof, to promote the prevention and detection of market abuse and help in maintaining orderly markets for emission allowances and related derivatives, it is necessary to establish an obligation for the auction platform to report the complete and accurate details of every auctioning transaction to their competent national authority designated under Directive 2014/65/EU and also to the European Securities and Markets Authority (ESMA). Such reporting will enhance the efficient monitoring of auctions in emission allowances and relevant linkages with the secondary market.

(43) Directive 2003/87/EC requires Member States to determine the use of revenues generated from the auctioning of allowances. For the avoidance of doubt, it should be required to transfer the auction proceeds directly to the auctioneer or other entity appointed by each Member State for this purpose.

(44) To ensure reliability and integrity of the auctioning process, allowances should be delivered to successful bidders against payment of the entire sum due to the auctioneer. Where successful bidders fail to pay the due sums in their entirety within the set deadline, sanctions for such failure should be set out in order to remedy and deter default of payment.

(45) In order to ensure a successful and reliable auction process, allowances to be auctioned should be transferred prior to the opening of a bidding window. The transfer of the allowances should be done by the Union Registry into a nominated account therein and held in escrow by the clearing system or settlement system acting as custodian. The allowances should be held in escrow until delivery of the allowances to successful bidders pursuant to the results of the auction. The next step in the process should also be set out, namely the delivery by the clearing system or settlement system of the allowances auctioned by one or more Member States to the successful bidders.

(46) Given that the auctioning of allowances consists of their primary issuance into the secondary market instead of their direct allocation to operators and aircraft operators free of charge, the clearing systems or settlement systems should not be bound by any obligations of performance with regard to the delivery of allowances to successful bidders or their successors in title in the event of any failure in delivery that is outside their control. Thus, the successful bidders or their successors in title should, in the event of any such failure to deliver auctioned allowances, be required to accept deferred delivery.

(47) Since the Member States are only required to deliver the allowances, they should not be required to deposit collateral other than the allowances themselves when auctioning. Thus, Member States should, when auctioning two-day spot contracts, only be subject to an obligation to pre-deposit the allowances to be auctioned into an escrow account held in the Union registry by the clearing system or settlement system acting as custodian.

(48) However, it is necessary for an auction platform, including any clearing system or settlement system connected to it, to implement adequate collateral processes and any other risk management processes necessary to ensure that auctioneers receive full payment for the allowances auctioned at the auction clearing price regardless of any payment default by a successful bidder or its successor in title.

(49) To ensure transparency and level playing field between auctioning and secondary market, it is appropriate for the structure and level of fees applied by auction platforms and the clearing system or settlement system connected to them to be no less favourable than comparable fees and conditions applied to transactions on the secondary market. In the interests of transparency, all fees and conditions should be comprehensible, detailed and publicly available. As a general rule, the costs of the auction process should be covered by the fees paid by the bidders as set out in the contract appointing the auction platform. However, it is important for the procurement of a cost-effective common auction platform for Member States to participate in the joint action from the outset. For this reason, it is appropriate that Member States participating in the joint action at a later stage can be required to bear their own costs and for the amounts of those costs to be deducted from the costs otherwise borne by bidders. Such provisions should, however, not disadvantage Member States wishing to participate in the joint action following the expiry of the appointment of an opt-out platform. Neither should Member States be disadvantaged when they temporarily participate in the joint action due to the absence of listing of a notified opt-out platform. The auctioneer should pay only for access to the auction platform, if anything. The costs of the clearing and settlement system, if any, should be borne by the bidders.

(50) To ensure a competitive procurement process for auction platforms, it should be possible to increase the maximum level of fees to be paid by the successful bidders in a limited manner where this is provided for by the procurement documents and only during the years where the annual auction volumes are reduced by more than 200 million allowances due to the operation of the market stability reserve.

(51) Due to their status of regulated market, the auction platforms should monitor the behaviour of bidders and notify the competent national authorities in the event of market abuse, money laundering and terrorist financing, in line with the reporting obligations laid down in Regulation (EU) No 596/2014 and Directive (EU) 2015/849 of the European Parliament and of the Council (14).

(52) In order to ensure a fair and competitive auctioning process, an auction platform should be provided with the option to impose a maximum limit on what a single bidder can bid for, expressed as a share of the total volume of allowances to be auctioned in individual auctions or over a given calendar year. Activation of this option should be subject to obtaining the Commission’s prior opinion thereon. Before giving its opinion, the Commission should consult the Member States on the proposal made by the auction platform. The Commission’s own assessment of whether the market for emissions allowances is sufficiently protected from market abuse should be expressed in its opinion.

(53) To ensure flexibility and integrity of the auctions, it is also appropriate that persons authorised by Member States to bid on behalf of clients of their main business abide by the rules provided for in this Regulation to ensure that their clients are adequately protected.

(54) In view of legal certainty and transparency, detailed provisions should be laid down on other aspects of auctioning such as publication, announcement and notification of the auction results, protection of confidential information, correction of errors in any payment or allowance transfer made and any collateral given or released, and the right to appeal the decisions of the auction platform.

(55) It is necessary to provide for the language regime applicable to any auction platform, in a way that ensures transparency and balances the objective of non-discriminatory access to the auctions with the need for cost-efficiency. Documentation not published in the Official Journal of the European Union should be published in a language customary in the sphere of international finance, namely English.

(56) Member States should have the possibility to provide, at their own cost, for the translation of all documentation into their national official language or languages. Where a Member State chooses to do so, opt-out platforms should also translate all documentation into that language or those languages, at the cost of the Member State that has appointed the opt-out platform concerned. As a corollary, an auction platform should be able to handle all oral and written communications from applicants for admission to bid, persons admitted to bid or bidders bidding in an auction, in any language where a Member State has provided for a translation to that language at its own cost, if the auction platform is requested to do so by such persons. In such case, the auction platforms should not be allowed to charge such persons for the additional cost of the translation. Instead, that cost should be borne equally by all bidders on the auction platform concerned to ensure equal access to the auctions throughout the Union.

(57) In order to ensure predictable and timely auctions, this Regulation should enter into force as a matter of urgency on the day following that of its publication in the Official Journal of the European Union,

HAS ADOPTED THIS REGULATION:

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject Matter

This Regulation provides for rules on the timing, administration and other aspects of the auctioning of allowances under Directive 2003/87/EC.

Article 2

Scope

This Regulation shall apply to the allocation through auctions of allowances under Directive 2003/87/EC.

Article 3

Definitions

For the purposes of this Regulation, the following definitions shall apply:

(1) ‘two-day spot contracts’ means contracts by which allowances are auctioned for delivery at an agreed date no later than the second trading day following the day of the auction;

(2) ‘bid’ means an offer in an auction to acquire a given volume of allowances at a specified price;

(3) ‘bidding window’ means the time period during which bids may be submitted;

(4) ‘trading day’ means any day during which an auction platform and the clearing system or settlement system connected to it are open for trading;

(5) ‘investment firm’ means investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU;

(6) ‘credit institution’ means credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council (15);

(7) ‘financial instrument’ means financial instrument as defined in Article 4(1), point (15), of Directive 2014/65/EU;

(8) ‘secondary market’ means the market in which persons buy or sell allowances either before or after they are allocated either free of charge or through auctioning;

(9) ‘parent undertaking’ means parent undertaking as defined in Article 2, point (9), of Directive 2013/34/EU of the European Parliament and of the Council (16);

(10) ‘subsidiary undertaking’ means subsidiary undertaking as defined in Article 2, point (10), of Directive 2013/34/EU;

(11) ‘affiliate undertaking’ means affiliate undertaking as defined in Article 2, point (12), of Directive 2013/34/EU;

(12) ‘control’ means control as referred to in Article 3(2) and (3) of Council Regulation No 139/2004 (17);

(13) ‘auction process’ means the process encompassing the setting of the auction calendar, the procedures for admission to bid, the procedures for submission of bids, the conduct of the auction, the calculation and announcement of the auction results, the arrangements for payment of the price due and transfer of auction proceeds, delivery of the allowances and management of the collateral needed to cover any transaction risks, as well as the surveillance and monitoring of the proper conduct of the auctions by an auction platform;

(14) ‘money laundering’ means money laundering as defined in Article 1(3), (4) and (6) of Directive (EU) 2015/849 of the European Parliament and of the Council (18);

(15) ‘terrorist financing’ means terrorist financing as defined in Article 1(5) and (6) of Directive (EU) 2015/849;

(16) ‘criminal activity’ means criminal activity as defined in Article 3, point (4), of Directive (EU) 2015/849;

(17) ‘auction platform’ means any public or private entity appointed to carry out the tasks referred to in Articles 27, 28, 30 and 31;

(18) ‘common auction platform’ means the auction platform appointed following a joint procurement procedure between the Commission and the Member States, as contracting authorities, pursuant to Article 26(1)

(19) ‘opt-out auction platform’ means the auction platform appointed by a Member State not participating in the joint action as provided in Article 26(1), as its own auction platform, pursuant to Article 29(1)

(20) ‘auctioneer’ means any public or private entity appointed to carry out the tasks referred to in Article 23;

(21) ‘nominated Union Registry account’ means an account in the Union Registry established by Delegated Regulation (EU) 2019/1122;

(22) ‘nominated bank account’ means a bank account designated by an auctioneer, a bidder or bidder’s successor in title for the receipt of payments due under this Regulation;

(23) ‘customer due diligence measures’ means the customer due diligence measures as referred to in Article 13 of Directive (EU) 2015/849 and the enhanced customer due diligence measures as set out in Articles 18, 18a and 20 of that Directive;

(24) ‘beneficial owner’ means beneficial owner as defined in Article 3, point (6), of Directive (EU) 2015/849;

(25) ‘duly certified copy’ means an authentic copy of an original document that is certified as being a true copy of the original by a qualified lawyer, accountant, notary public or similar professional who is recognised under the national law of the Member State concerned to attest officially as to whether a copy is in fact a true copy of its original;

(26) ‘politically exposed person’ means politically exposed person as defined in Article 3, point (9), of Directive (EU) 2015/849;

(27) ‘market abuse’ means market abuse as defined in Article 1 of Regulation (EU) No 596/2014;

(28) ‘inside information’ means inside information as defined in Article 7 of Regulation (EU) No 596/2014;

(29) ‘insider dealing’ means insider dealing as defined in Article 8 of Regulation (EU) No 596/2014;

(30) ‘unlawful disclosure of inside information’ means unlawful disclosure of inside information as defined in Article 10 of Regulation (EU) No 596/2014;

(31) ‘market manipulation’ means market manipulation as defined in Article 12 of Regulation (EU) No 596/2014;

(32) ‘clearing system’ means an infrastructure connected to the auction platform that provides clearing, margining, netting, management of collateral, settlement and delivery, and any other services, carried out by a central counterparty that is accessed either directly or indirectly through members of the central counterparty who act as intermediaries between their clients and the central counterparty;

(33) ‘clearing’ means all processes taking place before the opening of the bidding window, during the bidding window and after the closing of the bidding window until settlement, and involving the management of any risks arising during that interval, including during margining, netting, or novation, or any other services, possibly carried out by a clearing or settlement system;

(34) ‘margining’ means the process by which collateral is pledged by an auctioneer or a bidder, or one or more intermediaries acting on their behalf, to cover a given financial position, encompassing the entire process of measuring, calculating and administering the collateral put up to cover such financial positions, and which is intended to ensure that all payment commitments of a bidder and all delivery commitments of an auctioneer or one or more intermediaries acting on their behalf can be met within a very short period of time;

(35) ‘settlement’ means payment by a successful bidder or its successor in title, or by a central counterparty or a settlement agent of the sum due for allowances to be delivered to that bidder or its successor in title or to a central counterparty or a settlement agent, and delivery of the allowances to the successful bidder or its successor in title, or to the central counterparty or the settlement agent;

(36) ‘central counterparty’ means an entity that interposes either directly between an auctioneer and a bidder or its successor in title, or between intermediaries representing them, and acts as the exclusive counterparty to each of them guaranteeing the payment of the auction proceeds to the auctioneer or an intermediary representing it or the delivery of the auctioned allowances to the bidder or an intermediary representing it;

(38) ‘settlement agent’ means an entity acting as an agent providing accounts to the auction platform, through which accounts instructions for the transfer of the auctioned allowances given by the auctioneer or an intermediary representing it and for the payment of the auction clearing price by a successful bidder, its successor in title or an intermediary representing them are safely executed either simultaneously or nearly simultaneously in a guaranteed manner;

(39) ‘collateral’ means collateral security as defined in Article 2, point (m), of Directive 98/26/EC of the European Parliament and of the Council (19), including any allowances accepted as security by the clearing system or settlement system;

(40) ‘regulated market’ means regulated market as defined in Article 4(1), point (21), of Directive 2014/65/EU;

(41) ‘SMEs’ means operators, aircraft operators, shipping companies or regulated entities that are small and medium-sized enterprises within the meaning of Commission Recommendation 2003/361/EC (20);

(42) ‘market operator’ means market operator as defined in Article 4(1), point (18), of Directive 2014/65/EU;

CHAPTER II

THE DESIGN OF AUCTIONS

Article 4

Auctioned products

Article 5

Auction format

Auctions shall be carried out through an auction format whereby bidders shall submit their bids during a given bidding window without seeing bids submitted by other bidders. Each successful bidder shall pay the auction clearing price referred to in Article 7 for each allowance regardless of the price bid.

Article 6

Submission and withdrawal of bids

(a) the identity of the bidder and whether the bidder is bidding on its own account or on behalf of a client;

(b) where the bidder is bidding on behalf of a client, the identity of the client;

(c) the volume bid as a number of allowances in integral multiples of lots referred to in paragraph 1;

(d) the price bid in euro for each allowance, rounded to two decimal points.

Only a natural person established in the Union, appointed pursuant to Article 19(2), point (d), and authorised to bind a bidder for all purposes relating to the auctions, including the submission of a bid (the ‘bidder’s representative’), is entitled to submit, modify or withdraw a bid on behalf of a bidder.

Once submitted, each bid shall be binding, unless it is withdrawn or modified pursuant to this paragraph or withdrawn pursuant to paragraph 4.

Article 7

Auction clearing price and resolution of tied bids

An auction platform shall sort bids submitted to it in the order of the price bid. Where the price of several bids is the same, those bids shall be sorted through a random selection according to an algorithm determined by the auction platform before the auction.

Between two bidding windows on the same auction platform, the auction platform concerned may modify the methodology referred to in the first subparagraph. It shall consult the relevant contracting authorities referred to in Article 26(1) or Article 29(4) and the competent national authorities referred to in Article 47 on the planned modifications without delay.

The auction platform concerned shall take the utmost account of the opinion of the relevant contracting authority on the methodology referred to in this paragraph, where such an opinion has been provided.

The auction platform may extend the period referred to in the first subparagraph by 2 months, after having consulted the relevant contracting authorities referred to in Article 26(1) and notifying the competent national authorities referred to in Article 47, provided that such extension is necessary to ensure that a sufficiently liquid secondary market is in place for the application of paragraph 6.

The auction platform concerned shall take the utmost account of the opinion of the relevant contracting authorities on the extension referred to in this paragraph, where such an opinion has been provided.

Where the volume of allowances from cancelled auctions referred to in the first subparagraph cannot be distributed evenly as referred to in that subparagraph in accordance with the rules on minimum volume bid set out in Article 6(1), the Member State concerned shall auction those allowances over fewer than four auctions.

Where an auction that already includes volumes from a previously cancelled auction is cancelled, its volume shall be spread in accordance with the first and second subparagraphs starting from the first auction which is not subject to other adjustments due to previous cancellations.

Where the volume of allowances from cancelled auctions referred to in the first subparagraph cannot be distributed evenly as referred to in that subparagraph in accordance with the rules on minimum volume bid set in Article 6(1), the Member State concerned shall auction those allowances in the next scheduled auction.

From 1 January 2025, where an auction including allowances covered by Article 11 is cancelled, paragraph 9 shall apply.

CHAPTER III

AUCTIONS CALENDARS

Article 8

Timing, frequency and distribution of the volume of allowances

The bidding windows for auctions of allowances referred to in Article 13 conducted by the common auction platform shall be separate from the bidding windows for auctions of allowances referred to in Articles 10 and 11.

The bidding window shall be opened and closed on the same trading day and shall be kept open for no less than two hours. There shall be at least a two-hour delay between two consecutive bidding windows. The bidding windows of any two or more auction platforms shall not overlap.

The bidding windows for auctions of allowances referred to in Articles 10, 11 and 13 shall not overlap. From 1 January 2025, the allowances referred to in Articles 10 and 11 shall be auctioned in the same bidding windows.

By way of derogation from the first subparagraph, the common auction platform may conduct auctions of allowances referred to in Article 13 at other frequencies in the first six auctions, provided that this is necessary to improve the participation in the auctions and ensure the smooth operation of the auction process.

Where the common auction platform conducts auctions in one or two days a week, no other auction platform shall conduct an auction on those days.

Where the common auction platform conducts auctions on more than two days a week, it shall choose two days on which no other auctions may take place. It shall publish those days no later than at the publication of the auction calendar as referred to in Article 12(2).

The volume of allowances referred to in Article 13 to be auctioned on a common auction platform shall in principle be distributed evenly over the auctions held in a given calendar year, except for the additional volumes to be auctioned in accordance with Article 30d, point (2), of Directive 2003/87/EC, which shall in principle be distributed evenly in the period up to 31 May 2028.

Where the annual volume of allowances of a Member State cannot be distributed evenly over the auctions in a given calendar year in accordance with the rules for minimum volume bid set out in Article 6(1), the relevant auction platform shall distribute that volume over fewer auctions, ensuring that the volume is auctioned, in principle, at least every quarter.

Article 9

Circumstances preventing the conduct of auctions

An auction platform may cancel an auction where the proper conduct of that auction is disrupted or is likely to be disrupted. The volume of allowances of the cancelled auctions shall be distributed in accordance with Article 7(9).

Article 10

Annual volumes of auctioned allowances in respect of maritime transport activities and stationary installations

(a) Article 3gb, Article 10a(5a), Articles 10c and 10ca, Article 10d(4), Article 10e(3), Article 12(3-e) and (4), and Articles 24, 27, 27a and 29a of Directive 2003/87/EC;

(b) Article 1 of Decision (EU) 2015/1814;

(c) Article 6 of Regulation (EU) 2018/842 of the European Parliament and of the Council (21).

Any volume of allowances that cannot be auctioned in a given calendar year due to the rounding required by Article 6(1) shall be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

(a) the volume of allowances and the date when they are made available to the Innovation Fund pursuant to Article 9, fourth paragraph, Article 10a(1), (1a) and (5b), Article 10a(8), first, third and fourth subparagraphs, and Article 10e(4) of Directive 2003/87/EC;

(b) the frontloading of allowances for the Innovation Fund pursuant to Article 10a(8), second subparagraph, of Directive 2003/87/EC;

(c) the volume of allowances to be auctioned for the Recovery and Resilience Facility pursuant to Article 10e(2) until 31 August 2026.

Without prejudice to the first subparagraph, the annual volume of allowances to be auctioned pursuant to Article 10a(8) of Directive 2003/87/EC shall be at least 40 000 000 allowances. That volume shall be reflected in the auction calendar referred to in Article 12 of this Regulation.

(a) for 2024: 86 685 000 allowances;

(b) for 2025: 86 685 000 allowances;

(c) for 2026: 58 000 000 allowances.

The annual volume of allowances that need to be auctioned to reach the revenue referred to in Article 10e(2) and (3) of Directive 2003/87/EC may be adjusted to ensure that the objectives set out in Article 10e of that Directive are met. For the purposes of that adjustment, the revenue already obtained, the average auction clearing price for the six preceding calendar months, and the time remaining until 31 August 2026 shall be taken into account and the auction calendars shall be adjusted accordingly in accordance with Article 14(1), point (o) of this Regulation.

If the auction revenue referred to in Article 10e(2) and (3) of Directive 2003/87/EC is reached before the date of the last auction scheduled for the Recovery and Resilience Facility, the subsequent auctions of allowances for that Facility shall be immediately suspended in line with the relevant provisions for suspension of such auctions set out in Delegated Regulation (EU) 2019/1122. The relevant auction calendars shall be adjusted accordingly in accordance with Article 14(1), point (e) of this Regulation.

Article 11

Annual volumes of auctioned allowances in respect of aviation

Article 12

Auction calendar for individual auctions of allowances referred to in Articles 10 and 11 auctioned by the common auction platform

Article 13

Annual volumes and calendars for individual auctions of allowances in respect of buildings, road transport and additional sectors

If the maximum annual amount of revenue is reached earlier than initially foreseen in the auction calendar, the subsequent auctions of allowances for the Social Climate Fund shall be immediately suspended in line with the relevant provisions for suspension of such auctions set out in Delegated Regulation (EU) 2019/1122.

In both cases, the auction calendar shall be adjusted accordingly without undue delay in accordance with Article 14(1), to either increase the number of allowances auctioned for the Social Climate Fund for the period from September to December or to auction any excess volume on behalf of the Member States.

Article 14

Adjustments of auction calendars and of the volume of allowances to be auctioned

(a) the cancellation of an auction pursuant to Article 7(5) and (6), Article 9 and Article 31(4);

(b) the suspension of an opt-out platform that is provided for in Delegated Regulation (EU) 2019/1122;

(c) a decision by a Member State pursuant to Article 29(7);

(d) a settlement failure referred to in Article 36(5);

(e) the suspension of a process provided for in Delegated Regulation (EU) 2019/1122 that impacts the auction calendars;

(f) allowances remaining in the reserve for new entrants provided for in Article 10a(7) of Directive 2003/87/EC and allowances not allocated pursuant to Article 10c and Article 10ca of that Directive;

(g) a unilateral inclusion of additional activities, greenhouse gases or sectors pursuant to Article 24 or Article 30j of Directive 2003/87/EC;

(h) a measure adopted pursuant to Article 29a or Article 30h of Directive 2003/87/EC;

(i) the entry into force of amendments to this Regulation or to Directive 2003/87/EC;

(j) withholding of allowances from the auctions pursuant to Article 22(4);

(k) the necessity for an auction platform to avoid conducting an auction in breach of provisions laid down in this Regulation or in Directive 2003/87/EC;

(l) adjustments necessary pursuant to Articles 1 and 1a of Decision (EU) 2015/1814;

(m) a cancellation of allowances pursuant to Article 12(4) of Directive 2003/87/EC;

(n) adjustments necessary pursuant to Article 10a(9) of Directive 2003/87/EC;

(o) adjustments necessary pursuant to Article 10e of Directive 2003/87/EC;

(p) adjustments necessary pursuant to Article 30d or Article 30e(3) of Directive 2003/87/EC.

CHAPTER IV

ACCESS TO AUCTIONS

Article 15

Persons who may submit bids directly in an auction

Only a person who is eligible to apply for admission to bid pursuant to Article 18 and is admitted to bid pursuant to Articles 19 and 20 may submit bids directly in an auction.

Article 16

Means of access

Article 17

Training and helpline

An auction platform shall offer a practical web-based training module on the conduct of its auction process, including guidance on how to complete and submit any forms and a simulation of how to bid in an auction. It shall also make available a helpline service accessible by telephone and electronic mail at least during the working hours of each trading day.

Article 18

Persons eligible to apply for admission to bid

(a) an operator, an aircraft operator, a shipping company or a regulated entity having an operator account in the Union Registry which is opened in accordance with Delegated Regulation (EU) 2019/1122, bidding on its own account, including any parent undertaking, subsidiary undertaking or affiliate undertaking forming part of the same group of undertakings as the operator, the aircraft operator, the shipping company or the regulated entity;

(b) investment firms authorised under Directive 2014/65/EU bidding on their own account or on behalf of their clients;

(c) credit institutions authorised under Directive 2013/36/EU of the European Parliament and of the Council (22) bidding on their own account or on behalf of their clients;

(d) business groupings of persons listed in point (a) bidding on their own account and acting as an agent on behalf of their members;

(e) public bodies or state-owned entities of the Member States that control any of the persons listed in point (a).

Operators, aircraft operators and shipping companies may only participate in the auctions of allowances referred to in Article 10 and 11, whereas regulated entities may participate only in the auctions referred to in Article 13, including when they use the services of entities referred to in paragraph 1, points (b) to (e), to bid on their behalf.

(a) their clients are eligible persons to apply for admission to bid directly pursuant to paragraphs 1 or 2;

The auction platform concerned shall be able to rely on checks carried out by the persons referred to in the first subparagraph of this paragraph, their clients, or the clients of their clients as provided for in this paragraph.

Persons referred to in the first subparagraph of this paragraph shall be able to demonstrate to the auction platform, upon its request pursuant to Article 20(5), point (d), that the conditions set out in the first subparagraph of this paragraph, points (a) and (b), are fulfilled.

(a) the auctioneer;

(b) the auction platform including any clearing system and any settlement system connected to it;

(c) persons who are in a position to exercise, directly or indirectly, significant influence over the management of the persons referred to in points (a) and (b);

(d) persons working for persons referred to in points (a) and (b).

Article 19

Requirements for admission to bid

(a) the requirements for admission of the member or participant to trade allowances on the secondary market organised by the auction platform are no less stringent than those set out in paragraph 2;

(b) the auction platform receives any additional information necessary to verify the fulfilment of any requirements referred to in paragraph 2 that have not been previously verified.

(a) are established in the Union, or are an operator, an aircraft operator, a shipping company or a regulated entity;

(b) hold a nominated Union Registry account;

(c) hold a nominated bank account;

(d) appoint at least one bidder’s representative as referred to in Article 6(3), second subparagraph;

(e) satisfy the auction platform concerned, in line with applicable customer due diligence measures, as to their identity, the identity of their beneficial owners, integrity, business and trading profile having regard to the means of establishing the relationship with the bidder, the type of bidder, the nature of the auctioned product, the size of prospective bids and the means of payment and delivery;

(f) satisfy the auction platform concerned of their financial standing, in particular, that they are able to meet their financial commitments and current liabilities as they fall due;

(g) have in place, or are able to put in place when requested, the internal processes, procedures and contractual agreements necessary to give effect to a maximum bid-size imposed pursuant to Article 48;

(h) fulfil the requirements set out in Article 40(1).

Article 20

Submission and processing of applications for admission to bid

By way of derogation from the first subparagraph, members of or participants in the secondary market organised by the auction platform concerned who fulfil the requirements set out in Article 19(1) shall be admitted to bid without applying to the auction platform concerned for admission to bid.

(a) to comply with requests made by the auction platform for additional information or clarification or substantiation of information provided;

(b) to provide oral explanations following an invitation made by the auction platform to interview any representative of the applicant;

(c) to allow investigations or verifications requested by the auction platform, including on-site visits or spot-checks at the applicant’s business premises;

(d) to comply with requests made by the auction platform for any information required from the applicant, the clients of an applicant or, where applicable, the clients of their clients as provided for in Article 18(3);

(e) to comply with requests made by the auction platform for any information required to check compliance with the requirements set out in Article 19(2).

The auction platform concerned may:

(a) grant unconditional admission to bid in its auctions for a period not exceeding the term of its appointment, including any extension or renewal of that appointment;

(b) grant conditional admission to bid in its auctions for a period not exceeding the term of its appointment, subject to fulfilment of certain specified conditions by a given date, which it shall duly verify;

(c) refuse to grant admission to bid in its auctions.

Article 21

Refusal, revocation or suspension of an admission to bid

(a) is not eligible to apply for admission to bid under Article 18(1) or (2);

(b) does not meet the requirements set out in Articles 18 and 19, and, where applicable, Article 20; or

(c) is wilfully or repeatedly in breach of this Regulation, the terms and conditions of the admission to bid in its auctions or any other related instructions or agreements.

In case of suspicions referred to in the first subparagraph, the auction platform concerned shall report to the Financial Intelligence Unit referred to in Article 32 of Directive (EU) 2015/849 (‘FIU’) in accordance with Article 46(2) of this Regulation.

(a) who is negligently in breach of this Regulation, of the terms and conditions of the admission to bid in its auctions or of any other related instructions or agreements;

(b) who has otherwise behaved in a manner that is prejudicial to the orderly or efficient conduct of an auction; or

(c) who is referred to in Article 18(1), point (b) or (c), or Article 18(2) and has not bid in any auction during the preceding 220 trading days.

(a) grant or reinstate admission to bid with effect from a given date;

(b) grant conditional admission to bid or conditional reinstatement of the admission to bid subject to fulfilment of certain specified conditions by a given date, which it shall duly verify; or

(c) confirm the refusal to grant admission to bid, or the revocation or suspension of the admission to bid with effect from a given date.

The auction platform shall notify the person in question of its decision under the first subparagraph, points (a), (b) and (c).

(a) is orderly;

(b) does not prejudice the interests of their clients or interfere with the efficient functioning of the auctions;

(c) does not affect their obligations to comply with any payment provisions or any other related instructions or agreements;

(d) does not compromise their obligations regarding the protection of confidential information set out in Article 18(3), point (b)(ii), which shall remain in force for 20 years following their removal from the auctions.

The refusal, revocation and suspension referred to in paragraphs 1, 2 and 3 shall specify any measures needed to comply with this paragraph and the auction platform shall verify compliance with such measures.

CHAPTER V

APPOINTMENT OF THE AUCTIONEER AND ITS TASKS

Article 22

Appointment of the auctioneer