Enabling investment and innovation
Over-the-counter market
The over-the-counter market is a key part of hedge market developments. Hedge markets is an umbrella term for all the markets that industry participants use to manage risks.
Overview
In May 2025, we consulted on a proposed information gathering notice to collect information on OTC requests for contracts and responses to those requests. We are considering submissions and will provide an update once we have made a decision.
In June 2024 we decided to improve the Hedge Disclosure Obligations scheme to improve transparency of hedge information and provide clearer price signals for investment decisions in electricity generation and storage to support the electrification of New Zealand.
In 2023, we facilitated an industry working group that created a voluntary Code of Conduct for participants in the OTC market. Signatories commit to a number of underlying principles and behaviours when participating in the OTC market.
Timeline
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6 - 28 May 2025
Consultation —Improving visibility of competition in the OTC contract marketView consultation -
6 June 2024
Decision —Decision paper on improving Hedge Disclosure Obligations
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12 December 2023 - 6 February 2024
Consultation —Options to improve hedge disclosure obligationsView consultation -
19 October 2023
Code of conduct —For participants in the over-the-counter market
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11 July to 9 August 2023
Consultation —Improving hedge disclosure obligation requirementsView consultation -
13 December 2022
Correspondence —Outlines the findings of our information gathering exercise and our intended next steps
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31 October 2022
Correspondence —Requests participants to voluntarily provide off-market hedge information
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13 October 2022
Correspondence —Signals our intention to request information on off-market transactions for bilateral electricity hedge contracts
Project background
The over-the-counter (OTC) market is a type of off-market transaction in which multiple participants buy and sell financial contracts whose underlying asset is electricity.
We started work on the over-the-counter market in 2022 in response to restrictions placed on some New Zealand electricity market participants' ability to access the Australian Securities Exchange futures market.
Our aim is to improve the efficient operation of alternative markets. This will become increasingly important in managing the risks associated with New Zealand's transition to a low-emissions energy system.
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