Improving prudential security arrangements

Upcoming Open Closed Decision

View submissions Submissions closed 28 November 2025

Decision

Thanks to all those who provided submissions. We have decided to consult on two proposed Code amendments. We propose to:

reduce the post default exit period by four days for retailers with 1,000 ICPs or fewer
reallocate residual funds to purchasers in proportion to their percentage of total purchase volume.

These changes are intended to help lower barriers to growth and support a more diverse and vibrant retail electricity market. This should help deliver greater choice and value for consumers.

View consultation

Consultation

This consultation sought feedback on the issues and options for improving prudential security requirements for small retailers.

Prudential requirements are financial obligations on purchasers of electricity on the wholesale spot market. They require funds to be paid to the clearing manager in advance, to ensure generators can always be paid for the electricity they supply. This is important because electricity is consumed before it can be invoiced and paid for, and because generators are legally required to sell it through the wholesale market.

We also sought feedback on an option to enable ASX hedges to be taken into account in the calculation of prudential requirements.

We have considered the submissions received and are consulting on two proposed Code amendments.

Consultation paper