FAQs on transaction reporting – Question II.1.1.16

When reporting Delivery point or zone in Field No (48) of Table 1 and/or Field No (41) of Table 2, which code should be reported?


Answer:

According to the TRUM Field No (48) of Table 1 and Field No (41) of Table 2 identify the commodity delivery point or zone. This field reports the EIC Y code (or an alternative code to be agreed with the Agency if the EIC is not available) to identify the delivery and/or balancing point for the contract. In a country there are more than one balancing area, market participants should report the EIC Y code for the balancing area for which they have balancing agreements with the TSO. This is the area where the market participant delivers the energy commodity trough nominations/scheduling.

Where the contract stipulates that the gas is delivered at the interconnection point, then the EIC-Z Code for that interconnector may be used.

Where contract for the supply of gas may be delivered at an LNG or a gas storage facility, then the EIC W code for that facility should be reported.

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FAQs on transaction reporting – Question II.1.1.8

Are Virtual Gas Storage contracts reportable under REMIT?


Answer:

Insofar as virtual gas storage contracts are not contracts for the supply (or transportation) of natural gas, they are not reportable under REMIT.

However, contracts for the supply of natural gas within storage and LNG facilities are reportable contracts. For instance, when market participant A sells gas to market participant B within a storage or LNG facility, transferring the ownership of the gas, this is a reportable contract.

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FAQs on transaction reporting – Question II.1.1.9

We provide services for Gas Swings contracts and Gas Virtual Storage contracts: our so-called Structured products.  All those products are usually bespoke, and don’t follow any standards.

We are wondering if those products enter the scope of reporting, as there is no clear explanation in the MoP, and there is XML format explanation for those in ANNEX 3,  for :

1.    Standard contract (we will report those on a daily basis )

2.    Non standard

3.    Electricity transportation ( we do not provide this service)

4.    Gas transportation (we do not provide this service)

So we wonder if they jump into the non-standard page, and will have to be reported once a month.


Answer:

Gas storage and gas virtual storage contracts are not reportable under REMIT.

With regard to gas swing contracts, a list of examples on what and how to report is available in Annex II of the Transaction Reporting User Manual (TRUM).

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FAQs on transaction reporting – Question II.1.1.10

The list of standard contracts contains natural gas contracts named “Monthly Profile”, provided by AAA Brokers. In addition, XXX Brokers state that they are a PPAT, not an OMP and therefore their provided contracts might not necessarily be added to the list of standard contracts. For these reasons we are not sure whether bilaterally concluded fixed shape volume contracts are to be considered as standard or non-standard contracts?

Example: Bilaterally (Non-OMP) concluded natural gas fixed shape volume contract for multiple, non-consecutive months with individual capacities (MWh/h).


Answer:

If XXX Brokers are only PPTAs and not an Organised Market Place then bilaterally concluded fixed shape volume contracts should be considered non-standard contracts.

Please see TRUM_V2 page 17 and Annex II to the TRUM for clarification of the differences between standard contracts and non-standard contracts.

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FAQs on transaction reporting – Question II.1.1.11

Reference to Article 3 (1) of Commission Implementing Regulation (EU) No 1348/2014.

As for the framework agreements such as EFET General Agreement Concerning the Delivery and Acceptance of Electricity, could you please explain if they also should be reported even if an Individual Contract (in the meaning of the EFET General Agreement) wasn’t concluded?

Example: The Parties concluded the EFET General Agreement but they didn’t conclude any Individual Contract (in the meaning of the EFET General Agreement). First Individual Contract was concluded three months after conclusion of the EFET General Agreement.


Answer:

Our understanding is that such master agreement only sets out the rules for trading activities of the two counterparties of a contract, but does not set any obligation to the two parties.

In our opinion, the conclusion of such a general agreement of the Delivery and Acceptance of Electricity, i.e. the agreement sets out the general terms for trading, but does not specify the price setting of volume optionality, e.g. the amount of electricity, time and place of delivery and price, is not a reportable contract.

Furthermore, only the Individual contracts concluded under the terms of a General Agreement Concerning the Delivery and Acceptance of Electricity shall be reported to the Agency.

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FAQs on transaction reporting – Question II.1.1.12

How can we distinguish a contract with optionality embedded in it and reportable lifecycle events from an option that does not have life cycle events?


Answer:

In our view there are at least three different type of contracts with optionality.

1.  Options with given strike price(s) and traded at organised market places

2.  Options with given strike price(s) and traded bilaterally

3.  Option with complex price structure

In cases (1) and (2) above, there is no lifecycle event reporting requirement for the exercise of the option itself. However, if a new contract for the supply of gas or electricity is signed, then a trade report for that contract must be reported separately. The exercise of the option is not a reportable event, the new contract, the one that was created as a result of the option exercise, is a reportable trade.

However, the Agency recommends market participants to consider linking the transaction resulted from the option exercise to the option itself through the field linked transaction ID (32) to avoid possible false positive signals to the market monitoring activity of the Agency and/or the National Regulatory Authorities.  e.g. if a call option with a strike price of EUR 50 it is exercised, then market participants will report a separate trade for the price of EUR 50. However, if the market price of that forward on the day of the option is exercised, or the new contract is created, is EUR 60 this may cause a false positive signal to the market monitoring activity of the Agency and/or the National Regulatory Authorities.

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FAQs on transaction reporting – Question II.1.1.13

Our company is an electricity and natural gas market participant and has to fulfil the requirements of REMIT. In this context, we would be grateful if you could clarify provisions of TRUM concerning the definition of standard and non-standard contracts, especially of standard contracts concluded OTC. Also, relating to the standard and non-standard contracts a few questions are unsolved how to interpret particular data fields, please see below:

Non-standard contracts
Data field Question
7 Beneficiary ID Same as data field 8 standard contracts:

“For example, if party B is trading on behalf of party C, then party C is the beneficiary and party B is acting on behalf of C. However, by entering into a transaction on wholesale energy products, party B is a market participant unless it is only an agent in which case it would not appear in the report. In this case, the ID of C should be reported in field 1 and this field shall be left blank.”

This example is not clear. Does this case refer to a Broker trading activity? (TRUM, page 37)

9 Trading capacity of the market participant or counterparty in field 1 Same as data field 10 standard contracts:

In case we are acting on our own account and on behalf of a client does the term principal apply? (TRUM, page 39)

44 Load type Same as data field 52 standard contracts:

What would be the right term for Intraday trades, OT=Other and for day ahead power, BH=Hour/Block Hours? (TRUM, page 69)


Answer:

The Agency believes that the definition of standard and non-standard contracts provided in the TRUM is sufficiently clear. Please refer to point 3.2.5 and other areas of the TRUM as well as ANNEX II to the TRUM.  A standard contract concluded over the counter (OTC) in the REMIT context means any transaction completed outside of an Organised Market Place (OMP).

The description of data fields such as Beneficiary ID (8) and Trading capacity (9) are documented in the TRUM.

With regard to intraday trades, most likely they have a defined price and quantity and they should be reported with Table 1 and examples in Section 1 of Annex II to the TRUM should be used as a reference.  At the present, we are not aware of intraday trades to be reported with Table 2.

Depending on the characteristics of the delivery load, BH=Hour/Block Hours or SH=Shaped should be used.

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FAQs on transaction reporting – Question II.1.1.2

The term “Broker” is mentioned when defining Organised Market Places; that is, a Broker is considered an Organised Market Place. Elsewhere in TRUM there is the term “Executing Broker”. We consider our company an Executing Broker, as we execute client orders. Do these two terms, “Broker” and “Executing Broker” somehow overlap? Is an Executing Broker considered an Organised Market Place?

We would be grateful if ACER could clarify what is meant by “a Person Professionally Arranging Transactions”, so we might decide if we are a PPAT or not. This is relevant for us, as to our understanding the Organised Market Place obligations apply to PPAT’s, so if we are a PPAT we would have to have market surveillance etc.


Answer:

The Agency considers a broker a person or a firm that arranges transactions between a buyer and a seller for a commission when the deal is executed. This is not necessarily an Organised Market Place (OMP). Please see Article 2(4) of Commission Implementing Regulation (EU) No 1348/2014 for the OMP definition. Broker platforms are mentioned as examples for OMPs, but this does not mean all brokers automatically have to be considered as OMPs. This will only be the case if they fulfil the OMP criteria stipulated in Article 2(4) of Commission Implementing Regulation (EU) No 1348/2014.

An example of a broker who is not an executive broker would be a person facilitating deals between a buying and a selling side and then passes the names to both so that they can confirm a bilateral trade without the engagement of the broker.

An executing broker is a firm that executes deals on behalf of its clients on an OMP. An executing broker places an order and executes it without bringing together buying and selling side. The executing broker would not be an OMP.

However, in some circumstances, a brokerage firm (when considered a REMIT OMP) may offer the service of executing broker to their clients. The firm is providing two different services: one as OMP and one as executing broker. For the executing broker business the firm will be considered a REMIT market participant (please see Annex III to the TRUM available on the REMIT portal). This firm should register its executing broker business (and only that) as market participant with the relevant National Regulatory Authority.

With regard to Person Professionally Arranging Transactions definition, please see Question II.3.7 in 10th edition of the Agency’s Q&A on REMIT available on the REMIT portal.

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FAQs on transaction reporting – Question II.1.1.3

We have a query regarding the reporting of give up trades.

The question is whether we need to report the original executing counterpart for these trades. We ask as these trades are given up almost instantly so we do not always record the original counterpart (as they are not our counterpart for risk management purposes etc.).


Answer:

The Agency understands that the question above refers to members of the exchanges that give up their trades. In this case the Agency believes that members of the exchanges that give up their trades are REMIT market participants and they should report their trades. They can do it in two ways:

  • reporting two trade reports: one transaction executed on the exchange and one transaction as a back-to-back trade with their client; or
  • reporting one trade report: one trade report which includes their client information in the Beneficiary ID field (8) if the client is a REMIT market participant.

 

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FAQs on transaction reporting – Question II.1.1.4

Article 11(2) of the REMIT Implementing Regulation

We would like to kindly ask you for a clarification regarding reporting of transactions made at an organised market place in case the transaction order is placed through a broker (which in Poland is a legal requirement for transaction done at the power and gas exchange in case the trading party is not an exchange member itself).

In case a market participant places an order on a power and gas exchange through a broker, than the broker is the counterparty to the transaction made at the exchange. In such a situation

a. is the broker a “market participant” as defined in Article 2(7) of REMIT and should the broker register itself as a market participant with the national regulatory authority?

b. who is the market participant responsible for reporting the transaction to ACER? Is it the market participant who placed the order through the broker or is it the broker?


Answer:

With regard to the above question, if:

1)    a market participant places an order on an electricity and/or gas exchange through a broker (usually an executing broker); and

2)    the broker is the counterparty to the transaction made at the exchange

the executing broker is a REMIT market participant and has reporting obligations for all its trades and orders to trade placed on the exchange, including those that the broker gives up. Please see also Annex III to the TRUM.

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