Credit System

The AEX credit system controls how much exposure trading entities can take on with each counterparty. Every potential trade is checked against bilateral credit limits before a fill can occur. If either side lacks sufficient credit, the order is rejected.

Credit limit types

AEX supports three ways to measure credit exposure:

Type	What it measures	Calculation
Notional	Dollar value exposure (NZD)	price × quantity (MW) × contract hours
MW	Megawatt capacity	Raw quantity in MW
MWh	Megawatt-hour volume	quantity × contract hours

You can configure multiple limit types simultaneously for a counterparty relationship. All configured limits must pass for a trade to proceed.

tip

Notional limits are the most common choice for general credit risk management. MW limits are useful when your concern is peak capacity exposure; MWh limits suit volumetric energy exposure tracking.

Credit limit scope

Each limit can apply at one of two scopes:

• Total — a single limit applies across all contracts with that counterparty
• Per contract — a separate limit applies for each individual contract

Per-contract limits give you fine-grained control when exposure differs significantly between delivery periods or products.

Margin percentage

An optional marginPercent (0–100) can be applied to any limit configuration. When set, the margin increases the effective exposure calculated for each trade:

effective impact = raw impact × (1 + marginPercent / 100)

For example, a 10% margin on a notional limit means a $100,000 trade consumes $110,000 of credit capacity. This provides a safety buffer against market movements.

Bilateral credit checking

Credit checks on AEX are bilateral — both sides of a potential trade must have sufficient credit. When an order would result in a fill between Entity A and Entity B:

1. Entity A's limits with Entity B are checked
2. Entity B's limits with Entity A are checked
3. Both must pass for the fill to proceed

This means each entity independently controls how much exposure it is willing to take on with any counterparty. One entity setting a zero limit with another blocks all trading between them, regardless of what the counterparty has configured.

Credit allocated vs credit used

The credit system tracks two distinct components of credit consumption:

• Credit allocated — credit reserved during an auction clearing cycle (pre-open and open sessions). This is transient state that resets on engine restart and is released when the auction resolves.
• Credit used — credit committed by confirmed fills. This persists until the fill is settled or limits are adjusted by an administrator.

Credit available is calculated as: limit − used − allocated

Credit panel in AEM

Navigate to Management Panel → Credit to view your entity's credit positions.

The panel displays:

• Credit Summary — aggregate totals at the top: Total Limit, Used, and Available across all counterparty relationships
• Documentation Status — ISDA documentation status for each counterparty (see ISDA Documentation)
• Credit Limits — per-counterparty table showing:
  • Counterparty — the trading entity name
  • Limit — configured credit limit value
  • Used — credit currently consumed by fills
  • Avail — remaining available credit
  • Usage — a visual utilisation bar

Counterparties with docs_in_place documentation status appear at the top of the list. Counterparties without documentation are grouped in a collapsed Counterparties without Docs section.

note

The Credit panel requires the Credit.View permission. Editing limits requires Credit.Manage.

Editing credit limits

Users with Credit.Manage permission can request limit changes from the Credit panel:

1. Locate the counterparty row in the Credit Limits table
2. Click the edit icon on that row
3. In the Edit Credit Limit dialog, set:
   • Limit Type — Notional ($), MW, or MWh
   • Scope — Total or Per Contract
   • Limit Value — the maximum exposure amount
   • Margin % — optional buffer percentage (leave blank for none)
4. Click Request Change to submit

Most limit changes enter an approval workflow (see Credit Approval Workflow). Administrators with bypass approval permission can apply changes immediately.

Credit phase rules

Credit phase rules control whether credit limit changes are permitted based on the current market phase. They exist to prevent credit gaming — specifically, to stop an entity from reducing a counterparty's credit limit in the middle of an active market session to block in-flight trades from completing.

How rules are evaluated

Rules are evaluated in order, top to bottom. The first rule that matches both the market phase and the direction of the change determines the outcome. If no rule matches, the change is permitted.

Each rule has three attributes:

Attribute	Options	Meaning
Phase	Pre-open, Open, Closed, Suspended	The market session state this rule applies to
Direction	Increase, Decrease, Any	Whether the rule applies to increases, decreases (including deletions), or both
Outcome	Permitted / Blocked	Whether to allow or reject the change when this rule matches

A blocked rule may also include a reason string, which is shown to the user when their change is rejected.

Deletions of a limit configuration are treated as a decrease for rule evaluation purposes.

Default behaviour

The platform ships with two default rules:

1. Open + Decrease → Blocked — credit reductions and deletions are not permitted while the market is in the open phase
2. Pre-open + Decrease → Blocked — credit reductions and deletions are not permitted during the pre-open auction window

All other changes — including any increase in any phase, and any change during closed or suspended phases — are permitted by default.

Bypassing phase rules

Users with the Credit.Override permission bypass phase rule evaluation entirely. This permission is intended for platform operators who need to make emergency credit adjustments during a live session. Standard credit managers (Credit.Manage permission only) are always subject to the active rules.

Configuring phase rules

Phase rules are configured in the admin configuration panel:

1. Navigate to Admin panel → Configuration
2. Locate the Credit Phase Rules entry
3. Click the edit control to open the rule editor
4. Add, reorder, or remove rules as needed — use the ↑ and ↓ buttons to change rule priority
5. Click Apply (or Propose if your account requires approval) to save

Changes take effect immediately across the platform. All connected clients receive a notification so that any in-progress credit operations reflect the updated policy without requiring a reconnect.

caution

Removing all rules, or replacing the defaults with permissive rules, allows credit reductions at any point during a live session. Only do this if you have operational controls elsewhere that prevent credit gaming.

note

Phase rules apply to all credit limit changes submitted through AEM and the AEX API. They do not apply to credit consumption from trade fills — only to administrator-initiated limit modifications.

Next steps

• Credit Approval Workflow — how limit change requests are reviewed and approved
• ISDA Documentation — documentation status requirements for bilateral trading