The Functions of Energy Exchange with Emphasis on Assurance of Commitments Fulfillment Based on Transactions

Energy exchange has been proposed as one of the most important issues in the economic circumstances of the country, and it apparently plays an important role in the improvement of the situations of energy carriers’ exchanges. Energy exchange as a composed and organized market creates an atmosphere that all shareholders can act favorably toward physical trading of commodities and securities. In the final form of energy exchange, diverse range of internal and external brokers or a combination of them in partnership with investors, banks, insurers and producers, regional and international level will take possible actions in relation to the marketing and trading of energy carriers. The formation of such exchange in the past two decades has attracted lots of attention from known countries in the field of energy such as UK and the United States. One of the main functions of energy exchange is to guarantee the commitments based on transactions leading to the increase of transactions in energy carriers since large sums of money are exchanged in such transactions. Therefore, it is very important and necessary to ensure the fulfillment of commitments of the parties. The point which is the focus of the present study is to investigate the main component of energy exchange i.e. the function of the energy exchange and especially safety in settlement and assurance of commitments fulfillment causing many countries to establish such an exchange. This paper can be partly applied to the needs of the communities of law and economics in terms of gaining information about the core functions of the energy exchange.