FAQs on transaction reporting – Question II.1.1.5

Our Exchange, approximately every 6 months, runs regulated auctions for acquiring gas.

Auctions are created and organised through the passing of a resolution of a public administrative authority. These auctions are not freely produced at any time, they only happen periodically subject to the terms and conditions set by the mentioned Resolution.

Several vendors, previously qualified according to Rules approved by a public administrative authority, freely submit bids. There are two types of auctions:

  • In the first type, run one each year, cushion gas is bought for its use in the new gas storage sites to be put into operation during the following year. The amount to be bought is known in advance and the participants present complex bids of the gas to be sold with different delivery options (Virtual Point, interconnection, GNL, GNL in ships, …). At the moment, there is only one buyer.
  • In the second type, run every 6 months, gas is sold to last resort retailers. The amount is also known in advance, but in this case, the auction is run as descending clock auction with several rounds. Once the results are known the acquired gas is distributed in previously established percentages between the different last resort retailers.

The buyers do NOT submit any bid during the auction and they are previously nominated (e.g Last resort retailers appointed by the Ministry of Industry, Energy and Tourism).This predetermined set of buyers are known before the auction starts and they are obliged to buy the result of the auctions without any chance to refuse it.

The result of the auction will produce bilateral contracts with physical settlement between each of the successful bidding vendors and each of the buyer but just only one party (the sellers) have been able to determine the price of the contracts, having the other party (the buyer) the obligation to accept it according the results of the auction.

In any case, XXX Exchange does not participate in the settlement, payment, collaterals or management of these contracts.

As there is not a many-to-many trading possibility (because only the sellers submit bids), these auctions do not comply with the definition of organised market place (Article 2(4) of the REMIT Implementing Regulation). So, XXX Exchange does not have to report orders and trades and is not obliged to offer these services to the participants. Participants have to report on their own, but just only the final bilateral contracts that were created at the end of the auction.


Answer:

From the Agency’s point of view, the TRUM, available on the REMIT Portal, already addresses this question on page 15. If the Auction is not a multilateral system or any other system or facility in which multiple third-party buying and selling interests in wholesale energy products are able to interact in a way that results in a contract and therefore not an Organised Market Place (which has to be assessed by the person who runs the Auction), then the orders should not be reported. However, any trade concluded in such a platform has to be reported in Phase 2 (7 April 2016) as any other bilateral contract.

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FAQs on transaction reporting – Question II.1.1.6

Quarterly multi-round ascending clock auction sponsored by the Country A NRA and organized by XXX Exchange. This auction brings together one instrument seller against multiple buyers. Although this trading system (one-to-many) does not seem to fit the Agency’s understanding of an organised market place, the guidance from the NRA is that the results of these auctions should be reported anyway, presumably because the subject of the auction are standard contracts also admitted to continuous trading in XXX Exchange.

These contracts are futures and should be reported as per article (3)(1)(a)(viii) of Commission Implementing Regulation (EU) No 1348/2014, using Table 1. The structure of this table supports the reporting of a list of contracts, transactions and orders, but does not natively support some properties of these auctions (initial/closing price per round, demand/supply surplus per round, exit prices defined by agents, etc.).

How should these types of auctions be reported in REMIT?

The reporting model for standard contracts should accept the characteristics of clock auctions. In particular, we refer:

  • the possibility of several rounds;
  • the definition of a round opening price and a round closing price for each round;
  • the definition of intermediate price points defined by bidders, between the round opening price and the round closing price.

Answer:

From the Agency’s point of view, the TRUM, available on the REMIT Portal, is already addressing this question on page 15. If the Auction is not an Organised Market Place (which has to be assessed by the person who runs the Auction), then the orders should not be reported. However, any trade concluded in such a platform has to be reported in Phase 2 (7 April 2016) as any other bilateral contract.

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FAQs on transaction reporting – Question II.1.1.7

We assume that it is always the exchange member who is considered to be the market participant and therefore reported as counterparty. This includes those exchange members that do not use their membership for prop trading, but to provide DMA to their customers.

In such a setup, what would be the status of such a customer?

Would he also be considered a market participant?

If this is the case, he would also have a reporting obligation. How would this be fulfilled?

Can we assume that this customer would not need to report transactions in the standard format (because this is what the exchange member already does)?

Does this mean that the customer would need to report non-standard transactions, with the exchange member being the other counterparty?

We assume that a customer, who is not an exchange member, but trading via DMA of an exchange member, is also considered a market participant.

Reporting of the exchange trade in the standard format will be done for the exchange member. The customer will need to report a second transaction in the non-standard format.


Answer:

From the Agency’s point of view, this question is already addressed in the TRUM and explained into detail in Annex III to the TRUM available on the REMIT Portal.

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FAQs on transaction reporting – Question II.1.1.1

Reference to documents: Section 3.4.2 of the REMIT TRUM on Page 31

“Details of standard contracts, including orders to trade, shall be reported no later than on the working day following the conclusion of the contract or the placement of the order. Any modification or the termination of the concluded contract or the order placed shall be reported no later than the working day following the modification or termination”.

OMPs, Market Participants and RRMs need further clarification regarding the definition of a “Working Day” for management of their internal systems.

Further clarification is also needed for ACER in relation to their expectations of, “the next working day”

OMPs such as XXX Futures EU and XXX Spot (collectively “the Exchanges”) operate in multi-time-zone markets and their established support systems and processes are configured accordingly. The Exchanges use trading days with each trading day corresponding to an underlying processing day. The Exchanges appreciates that a trading day may not have the same definition as a “Working Day”.

The Exchanges request that ACER confirm that it is happy to accept that the below as being in conformance with the definition of a “Working Day”.

XXX has identified the following “processing window” times;

faqs-on-transaction-reporting-question-ii-1-1-1-table

These times correspond with the XXX’s internal systems. XXX believes that these processing day times should be compatible with ACER’s definition of a “working day”.

Furthermore, taking into consideration that REMIT reportable data should be reported on the next working day, please could ACER clarify whether it is happy to receive REMIT data on the following basis.

faqs-on-transaction-reporting-question-ii-1-1-1-table2

These times take into account the various necessary maintenance windows for the Exchanges markets.


Answer:

Working days should be understood as business days rather than the exchange trading days. This implies that bank holidays are not working days.

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