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FAQs on transaction reporting – Question II.3.1.1

a) If invoice data are required for phase 2 what invoice details will be used for reporting on non-standard contracts? Will the market participant have to use the preliminary invoice (before agreement and payment) or will he need to be reported based upon the final invoice details (agreed and paid by the counterparty)?

b) What price information is required in Table 1 data field 35 and Table 2 data field 15? Does the price need to include all components (basic price (Grundpreis/Leistungspreis), energy price (Arbeitspreis) including grid charge (Netznutzung), green tax (Ökosteuer), VAT (Mehrwertsteuer), concession fee (Konzessionsabgabe), renewable fee (KWK- und EEG-Umlage), surcharge for structuring) or just a specific part?


Answer:

On page 20 of the TRUM, under the Clarification of outright volume and price and reporting frequency for transactions executed within the framework of non-standard contracts“  the Agency clarifies that transactions executed under the framework of a non-standard contract have to be reported once the delivered quantity and the price are known, but still using Table 1 of the Annex to the Implementing Acts.

Still, the TRUM clarifies that ”As far the Agency is aware, details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price are available to both parties to the contract by the invoicing date at the latest.”

In Annex II to the TRUM, the Agency used the term “billing cycle” and “invoicing date” to indicate that this is the last point in time that price and quantity can be discovered. In addition, Annex II to the TRUM indicates that transactions executed within the framework of non-standard contracts can be reported on a monthly basis:

“The Agency understands that the billing cycle industry standards refer to calendar months and therefore twelve transactions per year (if the executions take place every month of the year) are expected to be reported no later than 30 days after the discovery of price and quantity. However, nothing prevents market participant from reporting the details of transactions executed within the framework of non-standard contracts on a more frequent basis even if the Agency would not expect it.”

Market participants should not understand the terms “billing cycle” and “invoicing date” as an indication that under REMIT they have to report the components of their invoices which include taxes, costs and adjustments not in the scope of REMIT.

Market participants should report the energy price for the energy delivered in the period of time the reported execution/contract refers to.

With regard to the energy price, market participants reporting transactions executed within the framework of non-standard contracts on a monthly basis should report the energy price as considered in contract.

If the price is fix, that price will be reported. If the price is fixed by a fixing index, a price formula, a strike price or anything else as defined in the contract, then that energy price has to be reported to the Agency.

With regard to the energy delivered, market participants should report the energy delivered as indicated in the execution report.

The Agency understands that invoices may cover several months: the current month plus some adjustments from previous months (these can sometimes go back up to 18 months in the past). Market participants have to report only the energy delivered in the period of time the execution report refers to without any adjustments from the past.

The Agency understands that the reporting of the energy delivered in the previous month may be over/under estimated and it recommends market participants to consider an amendment to the execution reports already reported in order to avoid that the discrepancy between the reported volume (or price) and the new information acquired may cause false positive signals to the market monitoring activity of the Agency and/or the National Regulatory Authorities.

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FAQs on transaction reporting – Question II.3.1.2

Reporting under Table 2 & Table 1 of non-standard contracts that are LNG transactions

Examples of Table 2 non-standard contracts provided in ANNEX II

None of the examples provided in ANNEX II are LNG transactions and executions under such transactions.  Could ACER develop and provide some examples in the TRUM?

For a fixed price purchase of physical LNG at a specific delivery point, the final quantity unloaded off a ship and paid for is unlikely to be the same quantity agreed on at the contractual stage due to factors such as boil off, regasification and other line losses.  Therefore whilst a specific quantity is agreed upfront, the final delivery quantity that is paid for will be different.

Therefore due to the change in quantity (which is unknown but expected), is the trade reportable:

  • Initially as a non-standard under Table 2 (based on the contracted volume) and then reported as an Execution under Table 1 after being invoiced (based on the final volume)?

Or reported as a standard trade under Table 1 (based on the contracted volume) and then re-reported as a lifecycle modification event when the final delivery quantity is known (if there are any changes)?

We enter into a deal to purchase 3m MMBtu of LNG for USD 7 at a LNG delivery point in X EU country.  Upon delivery, the final amount discharged from the ship and invoiced for is 2.95m MMBtu at USD 7.

Our interpretation is that such trades should be reported under Table 1 as at the time of transaction, the intention of both counterparties is deliver a fixed volume at a fixed price.  Any changes between the contractual volume and the final delivery volume should be reported as a lifecycle modification as there is no intent from the counterparties to delivery an amount different to that contracted, but is more a result of the nature of the product being traded.


Answer:

The reporting of contracts for the supply of liquefied natural gas (LNG) should not be different than any other contract for the supply of natural gas. The interpretation presented above seems a reasonable one. The only difference between a contract for the supply of natural gas at a balancing area and the contract for the supply of liquefied natural gas at the LNG terminal is the reporting of the delivery point. While market participants have to use the EIC Y code for the delivery of natural gas at balancing areas, for the LNG terminals market participants should use the EIC W code.

With regard to Table 1 and Table 2, the Agency understands that most of the contracts for the delivery of liquefied natural gas at EU LNG terminals are non-standard contracts (unless they are admitted to trade at an organised market place) and reportable with Table 2 if the contract does not have a defined quantity and price (with Table 1 otherwise) and the execution under the framework of those contracts have to be reported with Table 1. Same as for any other contracts for the supply of natural gas in the EU. Please see Annex II to the TRUM for additional guidance and reporting examples.

In addition, if two parties enter into a contract for the supply of liquefied natural gas with the optionality to deliver the commodity at more than one EU LNG terminal or/and other terminals outside the EU, market participant shall report all the EIC W codes for the EU LNG terminals included in the contract. Once the delivery of the commodity takes place, and the delivery point is known along with the price and quantity, market participants should report the execution under the framework of the non-standard contract on a T+1 month basis.

For a fixed price purchase of physical liquefied natural gas at a specific delivery point when the final quantity unloaded off a ship and paid for is unlikely to be the same quantity agreed on at the contractual stage, due several factors including those mentioned above, the Agency agrees with the interpretation provided above. These contracts should be reported under Table 1 as at the time of transaction, the intention of both counterparties is deliver a fixed volume at a fixed price.  Any changes between the contractual volume and the final delivery volume should be reported as a lifecycle modification as there is no intent from the counterparties to delivery an amount different to that contracted, but is more a result of the nature of the product being traded.

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FAQs on transaction reporting – Question II.3.1.3

We plan to report our Forward Contracts for Grid losses in Austria. These contracts are not trades at an OMP, but have the structure of a typical Forward (e.g. Yearly Base Forward 10MW 30€ for grid losses) with an outright volume and price.

In my understanding we should use the REMIT-Table 1 Scheme (Page 18 TRUM) because this is a non-standard product with an outright volume and price.

Can you confirm this? Is it necessary in this case that both counterparts report to ACER?


Answer:

As written in the Transaction Reporting User Manual (TRUM), non-standard contracts specifying at least an outright volume and price shall be reported using Table 1. As for any bilateral trade, both counterparties need to report to ACER with separate reports.

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FAQs on transaction reporting – Question II.3.1.4

Reference to Article 5 of Implementing Regulation: details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price shall be reported using Table 1 of the Annex. Transaction Reporting User Manual (TRUM) (version of 7 January 2015), page 17.

We understand the difference between standard and non-standard contracts. However, we are unsure of when to use which xml schema with regards to article 5(1) of the Implementing Acts (“Details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price shall be reported using Table 1 of the Annex”). There is a diagram in the “Transaction Reporting User Manual (TRUM)” (version of 7 January 2015), page 17 trying to clarify the situation. In our understanding standard contracts have to be reported no later than the following business day of when they were agreed upon.

Non-standard contract have to be reported no later than 30 days from its execution. What is meant exactly by execution – the date they were agreed upon (both parties signed the contract) or the delivery? If 30 days after this execution date the price and volume of the non-standard contract are not known, it will be transmitted by using table 2 for non-standard contracts. If the price and volume are known by this point in time, then the contract is only transmitted by using table 1 for standard-contracts. In which case will the process on the right hand side in this diagram take place: first the non-standard contract is transmitted using table 2 for non-standard contracts and then at “execution” it is transmitted again using table 1 for standard-contracts?

 

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Answer:

On 30 September 2015 ACER published a new edition of the Transaction Reporting User Manual (TRUM) which answers this question. In particular a new illustration “Decision tree for the reporting of standard and not standard contracts and the use of Table 1 or Table 2” was added to the TRUM. In addition, an explanation of what is an “execution” can be found in Annex II to the TRUM. Please note that T+30 should be understood as T+1 month as indicated in REMIT Implementing Regulation.

 

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FAQs on transaction reporting – Question II.3.1.5

I’m writing on behalf of our company. Will you be so kind and clarify to us next two questions:

1. If a given trade has no fixed price, but the price is set with the Price Index (which is known after the beginning of the delivery period), how it should be reported? Is there any example of that kind of trade?

2. If a given trade for example, for the year 2016, is decided to be changed in the middle of the year – either the price or the quantity of trade to be increased or decreased, then shell we just send the correction for the period in which the change is going to be or to generate again a new report for the hole period?

In other words: we have a trade for power block which is EU peak for a whole year of 2016. We’ve already sent a remit report for that trade on the day D+1 from the trade date. Then, in a few months, during the delivery period, we decide to buy more energy just for one week for example in august. Shall we generate a new report in which we’ll have a separate display for every week in the year or shall we create a new report just for that specific week for which we made changes?


Answer:

With regard to the first question, in Annex II of the Transaction Reporting User Manual (TRUM) available on the REMIT portal there are examples of Index trade reports. Also, examples of standard contracts and non-standard contracts index trades are described in the said annex.

In the Agency’s view, when an original trade for a given period of time has already been reported, and a new agreement/modification occurs during the delivery period, the Agency would expect a separate new trade to be reported.

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FAQs on transaction reporting – Question II.3.1.6

How should we report non-standard contracts and executions under the framework of non-standard contracts with two delivery zones?


Answer:

A non-standard contract that includes more than one delivery zone is reported with Table 2 by repeating the corresponding Field (48) delivery point or zone as many times as the delivery zones included in the contract identifying each EIC Y code.

When executions under the framework of a non-standard contract have a price which is set with different price formula depending on the delivery point of the commodity, then these executions should be reported separately (one report for each delivery point).

When executions under the framework of a non-standard contract have a price which is set with one price formula for all the delivery points of the commodity, and the volume split is known to the market participant, then these executions should be reported separately (one report for each delivery point).

When executions under the framework of a non-standard contract have a price which is set with one price formula for all the delivery points of the commodity, and the volume split is NOT known to the market participant, then these executions can be reported with one report (e.g. one report indicating the total volume and indicating , for example, two delivery points).

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FAQs on transaction reporting – Question II.3.1.7

What is the frequency and deadline when reporting non-standard products that change hourly (for example product based deliveries)?

a. Reporting the contract at the latest 1 month from signing the contract

b. But how about reporting the hourly energy of the contract? After 1 month of each delivery hour?


Answer:

Annex II to the TRUM explains the frequency and deadline when reporting non-standard products.

For the purpose of the reporting of the details of transactions executed within the framework of non-standard contracts, we understand that these transactions should be reported according to the billing cycle industry standards as the invoicing date is the last point in time when price and quantity can be discovered.

Furthermore, we understand that the billing cycle industry standards refer to calendar months and therefore twelve transactions per year (if the executions take place every month of the year) are expected to be reported not later than 30 days after the discovery of price and quantity. However, nothing prevents market participants from reporting the details of transactions executed within the framework of non-standard contracts on a more frequent basis.

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FAQs on transaction reporting – Question II.3.1.8

How to report a bilateral contract (initially classified as a non-standard contract and also reported in a non-standard format) in cases of any price fixing events (e.g. the client exercises an option)? This especially concerns such events which could be interpreted as a standard contract in a stand-alone perspective. (Vanilla) options are considered as being standard contracts (Table 1) and reportable in Phase 1 if executed over an OMP or identical to a product admitted to trading over an OMP (although the REMIT reporting requirement would be met if the trade falls within the scope of EMIR and has been reported as such).


Answer:

[UPDATED] based on additional input provided by the Agency’s stakeholders

Please see the example in Annex II to the TRUM. In Section 2 of the annex there are several examples on how to report bilaterally traded contracts and executions under those non-standard contracts.

If the price fixing event (e.g. the client exercises an option) is related to a non-standard contract reported with Table 2, then the event should be reported as execution with (Table 1) under the framework of a non-standard contact and not be interpreted as a standard contract. Please see Q. 3.1.28 whether the execution should be reported as EXECUTION or BILCONTRACT contract, also considering that examples reported in Annex II to the TRUM are non-exhaustive.

On the contrary, vanilla options that are considered as standard contracts should be reported with Table 1 and reportable in Phase 1 if traded over an organised market place and do not have reportable executions associated to them.

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FAQs on transaction reporting – Question II.3.1.9

Should a bilateral contract (initially classified as a non-standard contract and also reported in a non-standard format) keep its non-standard status and therefore any event under this contract will lead to a lifecycle event reportable under this non-standard contract (no standard contract will be reported and no standard contract format will be used)? Or will it be mandatory to report this contract as a standard contract, or as a non-standard contract in a standard contract format?


Answer:

A non-standard contract with no defined price or quantity, has to be reported using Table 2 with a timeline of T+1 month. The execution of optionality under that non-standard contract, reportable using Table 1, will still be part of Phase 2 and is reportable with a timeline of T+1 month.

Please see Annex II to the Transaction Reporting User Manual (TRUM) for additional details.

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FAQs on transaction reporting – Question II.3.1.10

Reference to Article 5 (1) of the REMIT Implementing Regulation

If an electricity supply contract (the “Contract”) concluded between a generator and a trader outside of an organized market, with delivery in the European Union, providing the right to the purchaser to waive its right to off-take a pre-defined percentage of the monthly and daily volumes of electricity determined in the Contract, can be reported using Table 2 of the REMIT Implementing Regulation.

In our interpretation, as the volumes of electricity which will actually be delivered under the Contract cannot be determined at the time of the conclusion of the Contract, the Contract may not be considered as a contract specifying an outright volume within the meaning of Article 5 (1) of the Implementing Acts. Therefore, the Contract may be reported using Table 2 of the Implementing Acts.
In our interpretation, the right of the purchaser under the Contract to waive its right to off-take a pre-defined percentage of the monthly and daily volumes of electricity may be reported in Fields No 21 to 23 of Table 2.

In our interpretation, no subsequent reporting would be required to the Agency due to the fact that the volumes supplied under the Contract deviate from the volumes set out in the Contract provided that the volumes of the electricity actually off-taken by the trader fall within the optionality conditions as reported to the Agency following the conclusion of the Contract.


Answer:

The contract shall be reported with table 2. The characteristics of the contract regarding volume optionality have to be reported in the fields 21-23. For more information please see the TRUM as well as Annex II of the TRUM for specific examples.

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