Code Amendments Gazetted
The Authority has decided to introduce arrangements to manage a retailer default situation. The key elements of the arrangements are:
- a regulated process for resolving a retailer default is initiated when a retailer does not fulfil financial obligations to the clearing manager, becomes insolvent, or the retailer’s use-of-system agreement (UoSA) with a distributor is terminated because of a serious financial breach by the retailer (and certain other conditions are met)
- the defaulting retailer will have seven days to resolve the default situation (phase one)
- if the default situation is not resolved, the Authority will advise the customers of the defaulting retailer that they have seven days to switch to another retailer (phase two)
- the Authority will have three days to arrange to assign all remaining customers to a new retailer: first by running a two-stage tender process; and then by mandatory allocation process (phase three)
- all customers of the defaulting retailer are to be assigned to a new retailer 18 days from the process being initiated.
The Authority is finalising a plan for implementation of the new arrangements. The Authority considers that the key implementation actions will be:
- develop a process manual to specify the step-by-step actions the Authority will take if there is a retailer default situation
- finalise the guideline for managing a retailer default situation by including further detail identified during development of the process manual
- undertake a desktop exercise involving the Authority, the clearing manager, registry and participants to test the effectiveness of the arrangements and the preparedness of each party.
The amendments to the Code have been gazetted and will come into effect on 16 December 2013.
The Authority would like to thank all the market participants that provided feedback and support on the proposed arrangements to manage a retailer default situation. The Authority will be in touch to discuss the implementation process in greater detail in the coming weeks.