1. Code Modification Proposal No 0315
An Overview

2. Contents
The Background The Proposal Points of Note Example Time-Line Comparison of Current and Proposed Processes

3. Background
Increase in instances of User’s continually receiving Further Security Requests within a short period of time signalling insufficient security being held EBCC Identifies weakness in existing Further Security Request Rules Current rules allow for a ‘topping up’ culture to meet short-term needs EBCC have developed this proposal with the intent of reducing the risk to all market participants Corona Energy agree to sponsor this proposal

4. Proposal
Extend the provisions in Section X2.10 to enable the scale back of a User’s utilised security value (Cash Call Limit) Scale Back initially set at 20% Scale back to be implemented following a 3rd FSR within a 28 day measurement period Resulting Cash Call Limit to remain in place for 12 months (re-basing period) Any further 3rd FSR within a 28 day measurement period within the 12 month re-basing period will result in a further Scale Back A new re-basing period will commence

5. Proposal Cont…
Upon completion of the re-basing period, without further periods being triggered, the User’s Cash Call Limit is revised The User will have the option to request the return of Security provided conditions under X2.3.5 are met.

6. Points of Note
Proposal draws on learning from Transportation Credit Arrangements where similar actions are taken in accordance with V To facilitate the changes in relationship between the User’s Cash Call Limit and Secured Credit Limit it is proposed that provisions of section X2.4 and X2.2 be amended Prior to the new process commencing the User will have been engaged on at least 7 occasions to discuss their situation Will change the focus from Further Security Requests to the Cash Call process to encourage User’s self management of exposure levels

7. Points of Note cont…
Managing exposures through Cash Call process will escalate any issues to EBCC more rapidly
Designed to provide an incentive to the User to manage their security appropriately
The existing Cash Call process does not change in any way

8. Cash Call Limit 20% Scale-Back Timeline
Day 1 – 3rd FSR Triggered in 28 day Measurement Period. New Measurement period begins. 20% Cash Call Limit Scale Back Triggered.
Day 9 – FSR Issued. 20% Scale Back Notice Issued.
Day 10 – 12pm deadline to Appeal the 20% Scale Back Notice . Cash Call Limit Scaled Back if not Appealed by deadline.
Ongoing – Exposures Managed via Existing Cash Call Process
Day 2 – FSR Issued. Scale Back Notice Issued.
Day 12 – Security in respect of FSR issued D2 are received.
Day 8 – Indebtedness Peaked triggering Further FSR and a Further 20% Scale Back.
Day 19 – Security in respect of FSR issued D9 are received.
Day 3 – 12pm deadline to Appeal the 20% Scale Back Notice. Cash Call Limit Scaled Back if not Appealed by deadline.

9. Process Following Present Method

10. Process Following Proposed Method