Counterparty Due Diligence Policy

Why this policy exists

In certificate markets, a bad counterparty is worse than a bad price.
One weak link creates compliance risk, reputational damage, financial exposure, and regulatory issues.

Due diligence is therefore not a courtesy — it’s the gatekeeper that protects every trade, every client, and the integrity of the market.

This policy explains how we decide who we trade with.

1. We verify identity — properly

Before onboarding anyone, we confirm:

  • legal entity name
  • incorporation number
  • registered office
  • trading address
  • corporate website
  • phone numbers and emails tied to the business
  • key personnel and authorised signatories

If something feels inconsistent — different countries, mismatched documents, generic email domains — onboarding pauses until clarified.

2. We confirm beneficial ownership

We require full, accurate disclosure of:

  • individuals who own or control the entity
  • shareholders with significant influence
  • directors and managing officers

Opaque ownership structures, shelf companies, nominee directors, or unexplained “management companies” trigger enhanced checks.

If ultimate beneficial ownership cannot be verified, onboarding ends.

3. We assess financial stability

We make sure counterparties can meet their obligations.
This includes reviewing:

  • company accounts
  • financial filings
  • credit ratings (where available)
  • trading track record
  • size and frequency of historical certificate activity
  • liens, insolvency notices, or adverse records

If there’s a risk they can’t settle a trade, we don’t enter into one.

4. We evaluate market reputation

We look for evidence of:

  • ethical behaviour
  • transparent trading
  • consistent documentation
  • no involvement in double counting
  • no unresolved disputes
  • stable registry history

We speak with previous counterparties when appropriate.
A good reputation isn’t everything, but a bad one is enough to stop us.

5. We perform sanctions and AML screening

Before onboarding (and throughout the relationship), we screen against:

  • UK OFSI
  • EU sanctions
  • UN sanctions lists
  • US OFAC
  • local / regional sanctions
  • global PEP (politically exposed persons) databases
  • adverse media
  • AML watchlists

Anyone flagged is automatically rejected — no negotiation.

6. We understand the counterparty’s business model

We request and assess information about:

  • business activity
  • geographies of operation
  • certificate schemes used
  • expected monthly/annual volumes
  • typical trade size
  • expected payment behaviour
  • customer base
  • sources of funds

The goal isn’t bureaucracy — it’s to understand what “normal” looks like so abnormal activity stands out.

7. We check registry status meticulously

We confirm:

  • active registry accounts
  • authorised users
  • delivery capabilities
  • historical transactions
  • proper documentation
  • absence of liquidity “red flags”

If someone says they can deliver 10 GWh of REGOs but their registry account history shows no activity for three years, we investigate why.

8. Enhanced Due Diligence (EDD) for higher-risk cases

EDD is applied when:

  • ownership structures are unusual
  • operations involve high-risk jurisdictions
  • volumes are unusually large
  • the counterparty is new to the market
  • trading patterns are inconsistent
  • adverse media exists
  • certificate provenance requires deeper verification

EDD may include:

  • director ID checks
  • notarised documents
  • source-of-funds verification
  • detailed business explanations
  • video verification calls
  • external intelligence reports

If transparency drops at any point, onboarding stops.

9. We review counterparties continuously

Due diligence is not a “once and done” exercise.
We monitor:

  • changes in ownership
  • new directorships
  • sanctions updates
  • abnormal trade patterns
  • mismatches in registry behaviour
  • payment irregularities
  • negative news or disputes

If the risk profile changes, so do our controls.

10. Refusing or terminating relationships

We reserve the right to:

  • decline onboarding
  • pause trading
  • request additional documentation
  • apply enhanced checks
  • terminate the relationship at any time

Reasons include:

  • failure to provide information
  • suspected fraud
  • AML or sanctions concerns
  • unverified claims or documentation
  • unacceptable conduct
  • attempts to bypass controls

We would rather lose a counterparty than compromise our standards.

11. Confidentiality

Information obtained during due diligence is:

  • securely stored
  • handled strictly on a need-to-know basis
  • never disclosed externally unless required by law

We treat counterparty information with the same care we expect from others.

12. Reporting concerns

If you have concerns about a counterparty (existing or potential):

Email: compliance@energymarketingandtrading.com
Anonymous channel: [secure link]

Every concern is investigated.
Retaliation is prohibited.

Why this matters

A clean counterparty network protects:

  • certificate integrity
  • market credibility
  • our clients
  • our staff
  • our reputation
  • your reputation
  • the wider energy transition

This is how we make sure we trade with the right people — every time.

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