Section 95912 - Auction Administration and Participant Application(a) Administration of the Auctions. (1) The Executive Officer may serve as auction administrator or designate an entity to serve as auction administrator.(2) The Executive Officer may serve as financial services administrator or may designate a qualified financial services administrator to conduct all financial transactions required by this article.(b) The Executive Officer may direct that the California GHG allowances designated for auction be offered through an auction conducted jointly with other jurisdictions to which California links pursuant to subarticle 12, provided the joint auction conforms to this article.(c) Auction Notification. At least 60 days prior to each auction, the auction administrator shall publish the following information:(1) The date and time of the auction;(2) Auction application requirements and instructions;(3) The form and manner for submitting bids;(4) The procedures for conducting the auction;(5) The administrative requirements for participation;(6) The number of allowances that will be available at the auction; and(7) For the announcement of the first quarter auction, the number of allowances to be available for sale during the calendar year and the Auction Reserve Price in effect for the calendar year pursuant to section 95911(c).(8) If California has linked to a jurisdiction operating an External GHG ETS pursuant to subarticle 12, the number of allowances in section 95912(c)(6) may also include the allowances made available by the linked jurisdiction. The auction administrator may modify the auction notice to reflect changes in allowances made available by any linked jurisdictions up until 30 days prior to an auction.(d) Auction Eligibility . (1) The Executive Officer must approve an entity's auction eligibility before that entity may participate in an auction.(2) Only an entity registered into the Cap-and-Trade Program pursuant to section 95830 is eligible for auction participation.(3) An entity whose holding account has been revoked or is currently suspended pursuant to section 96011 is not eligible to participate in an auction. An individual associated pursuant to sections 95830, 95832, and 95833 with an entity whose holding account has been revoked or is currently suspended pursuant to section 96011 is not eligible to participate in an auction.(4) An entity must provide auction eligibility information, including any changes required by subarticle 5, at least 30 days prior to an auction in which it intends to participate, including:(A) Except as otherwise provided in section 95833(e)(4), the existence of any direct or indirect corporate associations pursuant to sections 95833 and 95911(d);(B) An allocation of the purchase limit among associated entities as defined in section 95833, or a change in the existing allocation of the purchase limit among associated entities, if applicable;(C) An allocation of the holding limit among associated entities as defined in section 95833, or a change in the existing allocation of the holding limit among associated entities, if applicable; and(D) An attestation disclosing the existence and status of any ongoing investigation or an investigation that has occurred within the last ten years with respect to any alleged violation of any rule, regulation, or law associated with any commodity, securities, environmental, or financial market for the entity participating in the auction, and all otherentities with whom the entity has a direct corporate association pursuant to section 95833 that participate in a carbon, fuel, or electricity market. The attestation must be updated to reflect any change in the status of an investigation that has occurred since the most recent auction application attestation was submitted.(5) An entity with any changes to the auction eligibility information listed in section 95912(d)(4) within 30 days prior to an auction may be denied eligibility for the auction if the updated information represents a material change. For the purposes of changes to indirect and direct corporate associations, this section only applies to those corporate associates with entities registered in the tracking system.(6) Prior to participating in an auction, any primary or alternate account representative that will be submitting bids on behalf of entities eligible to participate in an auction must have already: (A) Complied with the Know-Your-Customer requirements of section 95834; and(B) Submitted the additional information required by the financial services administrator contained in Appendix A of this Article.(e) Auction Participation Approval. An entity that intends to participate in an auction must inform the Auction Administrator at least 30 days prior to an auction of its intent to bid in an auction, otherwise the entity may not participate in that auction. An entity must be declared eligible for auction participation pursuant to section 95912(d) before it can be approved for auction participation.(f) Protection of Confidential Information. To the extent permitted by state law, the Executive Officer, the Auction Administrator, and the financial services administrator will treat the auction eligibility information submitted pursuant to section 95912(d)(4) and not listed for release pursuant to section 95912(i)(5) as confidential business information.(g) All bids will be considered binding offers for the purchase of allowances under the rules of the auction.(h) Auction participants must provide a bid guarantee to the financial services administrator at least 12 days prior to the auction.(1) The bid guarantee must be in one, or a combination of, the following forms: (A) Cash in the form of a wire transfer; or(B) An irrevocable letter of credit; or(D) All forms of bid guarantee must be in a form that may be accepted by the financial services administrator consistent with U.S. banking laws and bank practices.(2) The bid guarantee submitted by any entity registered with California will be in U.S. dollars.(3) A bid guarantee submitted in any form other than cash must be payable within three business days of payment request submitted by physical presentment or electronically by facsimile, or other electronic form accepted by the financial services administrator.(4) The bid guarantee will be in the currency used by the jurisdiction with which the entity has registered.(5) The amount of the bid guarantee must be greater than or equal to the maximum value of the bids to be submitted. (A) The value of a set of bids equals the cumulative quantity of bids submitted at or above a price times that price. The value of the set of bids is calculated at each price at which the bidder will submit a bid.(B) The maximum value of a set of bids is the highest value of a set of bids calculated at each price at which the bidder will submit a bid.(C) The auction participant submits a single bid guarantee to cover bids in both the Current and Advance Auctions and the amount of the single bid guarantee must be greater than or equal to the combined maximum value of the Current and Advance Auction bids to be submitted.(6) The bid guarantee will be made payable to the financial services administrator.(7) The bid guarantee will expire no sooner than 26 days after the auction date.(8) The financial services administrator will evaluate the bid guarantee and inform the auction administrator of the value of the bid guarantee once it is found to conform to this section and is accepted by the Executive Officer.(9) If an entity has submitted more than one form of bid guarantee then the financial services administrator will apply the instruments to the unpaid balance in the order the instruments are listed in section 95912(h)(1).(10) The auction administrator will apply the value of the bid guarantee to the Current Auction first when accepting bids pursuant to section 95911(e)(3). The remaining value of the bid guarantee will be used to determine acceptance of bids into the Advance Auction.(i) After the auction administrator has notified the Executive Officer of the results of the auction the Executive Officer will:(1) Review the conduct of the auction by the auction administrator, then certify whether the auction met the requirements of this article;(2) After certification, direct the auction administrator to notify each winning bidder of the auction settlement price, the number of allowances that the bidder purchased, the bidder's total purchase cost, and the deadline and method for submitting payment.(3) After certification, direct the financial services administrator to: (A) Collect cash payments from winning bidders within seven days of notifying them of the auction results;(B) Use the bid guarantee to cover payment for allowance purchases by any entity that fails to make cash payment within seven days after bidders are notified of results and place the proceeds into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8;(C) Deposit auction proceeds from sales of ARB allowances sold at auction into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8;(D) Distribute auction proceeds to entities that consigned allowances for auction pursuant to section 95910(d);(E) Return any unused cash bid guarantee; and(F) Return any bid guarantee form other than cash after receipt of payment for allowances awarded.(G) A bid guarantee in a form other than cash may be held by the financial services administrator for multiple auctions or reserve sales upon agreement by the financial services administrator and bidder.(4) Upon determining that the payment for allowances has been deposited into the Greenhouse Gas Reduction Fund created pursuant to Government Code section 16428.8, or transferred to entities that consigned allowances, transfer the allowances purchased into each winning bidder's Holding Account, or to its Compliance Account if needed to comply with the holding limit;(5) Inform each approved external GHG emissions trading system and the associated tracking system of the serial numbers of allowances purchased at auction; and(6) Following the auction, the Executive Officer will publish at www.arb.ca.gov the following information:(A) The names of the bidders;(B) Auction settlement price; and(C) Aggregated or distributional information on purchases with the names of the entities withheld.(j) The auction bidding window may be delayed, rescheduled, or cancelled due to technical systems failures and to protect the environmental stringency of the California Cap-and-Trade Program.(1) The opening of the auction bidding window may be delayed or paused for no more than one hour by the Executive Officer due to technical systems failures.(2) The bidding window may be rescheduled by the Executive Officer due to technical systems failures or to protect the environmental stringency of the California Cap-and-Trade Program.(3) Rescheduled Auctions. (A) The auction bidding window must be rescheduled to ensure the financial services administrator can use any bid guarantees submitted pursuant to section 95912 prior to the expiration date required by section 95912.(B) No additional auction applications may be accepted.(C) The financial services administrator will keep all bid guarantees to complete financial settlement of the auction after the rescheduled bidding window.(D) No bid guarantees provided pursuant to section 95912 may be amended.(E) If technical systems failures cannot be resolved and a bidding window cannot be rescheduled to meet the requirements of this section, then the Executive Officer will cancel the auction bidding window.Cal. Code Regs. Tit. 17, § 95912
1. New section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code section 11343.4 (Register 2011, No. 50).
2. Amendment of section heading and section filed 8-29-2012; operative 9-1-2012 pursuant to Government Code section 11343.4 (Register 2012, No. 35).
3. New subsections (c)(8) and (i)(1)(E) filed 6-24-2013; operative 10-1-2013 (Register 2013, No. 26).
4. Amendment of section and NOTE filed 6-26-2014; operative 7-1-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 26).
5. Amendment of subsections (d)(4)(D)-(E), repealer of subsection (d)(4)(F), amendment of subsections (j)(1)(B)-(C), new subsection (j)(1)(D), amendment of subsections (j)(10) and (k)(2), repealer of subsections (k)(2)(A)-(F), new subsections (k)(3)-(k)(3)(G) and subsection renumbering filed 9-18-2017; operative 10-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
6. Amendment filed 3-29-2019; operative 3-29-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13). Note: Authority cited: Sections 38510, 38560, 38562, 38570, 38571, 38580, 39600 and 39601, Health and Safety Code. Reference: Sections 38530, 38560.5, 38564, 38565, 38570 and 39600, Health and Safety Code and Section 16428.8, Government Code.
1. New section filed 12-13-2011; operative 1-1-2012 pursuant to Government Code section 11343.4 (Register 2011, No. 50).
2. Amendment of section heading and section filed 8-29-2012; operative 9-1-2012 pursuant to Government Code section 11343.4 (Register 2012, No. 35).
3. New subsections (c)(8) and (i)(1)(E) filed 6-24-2013; operative 10-1-2013 (Register 2013, No. 26).
4. Amendment of section and Note filed 6-26-2014; operative 7/1/2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 26).
5. Amendment of subsections (d)(4)(D)-(E), repealer of subsection (d)(4)(F), amendment of subsections (j)(1)(B)-(C), new subsection (j)(1)(D), amendment of subsections (j)(10) and (k)(2), repealer of subsections (k)(2)(A)-(F), new subsections (k)(3)-(k)(3)(G) and subsection renumbering filed 9-18-2017; operative 10/1/2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 38).
6. Amendment filed 3-29-2019; operative 3/29/2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 13).