The European Union’s securities watchdog is considering a rare measure to help energy companies struggling to find enough cash to cover their legal guarantees amid the current price crisis, Reuters reported, citing news.com.

The European Commission is due to present on Wednesday a package of measures to help energy companies facing a liquidity crisis.

Utilities often sell electricity up front, but must maintain a minimum “margin” or cash deposit in case of default before the electricity is delivered.

The size of the required guarantees increased in parallel with the increase in energy prices.

“We see tension for individual market participants and are actively considering whether, in addition to such supervisory monitoring, regulatory measures are needed. These include safeguards and circuit breakers,” said a spokesperson for the European Securities and Markets Authority (ESMA).

ESMA directly regulates EU clearing houses, which in turn set mandatory margin levels based on potential market and counterparty risks.

Government intervention in this area is rare, especially since the global financial crisis of more than a decade ago led to stricter margin obligations.

The need to roughly double the London Metal Exchange’s compensatory fund earlier this year, when nickel prices surged after Russia’s invasion of Ukraine, was a reminder of the need to avoid weakening compensators.

Some industry officials hope that non-cash forms of collateral, such as “demand” bank guarantees or letters of credit, which are widely used in the United States in physical energy markets, could be used.

A representative of the clearing industry said that any relaxation of margin rules should only apply to non-financials in the energy market because, based on historical data, the likelihood that the energy and banking sectors will suffer at the same time is low.

Another alternative to using cash is to allow energy companies to post EU emissions allowances as margin, the official added.

Allowing their use or other accompanying changes would mean the need to relax the bloc’s EMIR derivatives rules and regulatory guidance.

Circuit breakers mean temporary trading stops after an unusually large price movement.

“Any regulatory measures in the financial markets must take due account of the importance of maintaining financial stability in the market, including market infrastructure and market participants. Any measures must therefore be carefully assessed and considered to ensure that they deliver benefits without increasing risks to financial stability in the system,” ESMA said.

Last week, the Bank of England and the Treasury announced a 40 billion pound ($46.7 billion) energy market funding scheme to help market participants deal with liquidity problems.

On Monday, the Bank of England, which regulates UK clearing houses, declined to comment on whether it was considering specific collateral measures.