FAQs on transaction reporting – Question II.3.4.8

The question is about submitting the notional amount (Data Field R1.38). We would do so in a monthly rhythm. There are three dates where we get new information about the amount in month M, i.e. M+1WD, M+14WD, and 2M-10WD (WD being working days). The initial amount could be corrected twice in the course of two month following the month of delivery.

We wonder if we are to correct execution messages as well and if we have to do so every month separately or after the end of the calendar year for the whole delivery year.

In the FAQ document we found Question 3.4.3 which reads that “…the Agency currently would not expect any life-cycle event based on actual values available from the DSOs.” How is this quote to be interpreted to the effect of submission of executions?


Answer:

As stated in FAQ 3.4.3 there is no expectation to update submitted EXECUTION reports unless Market Participants prefer to do so.

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FAQs on transaction reporting – Question II.3.4.9

Is an execution message required for a delivery period without supplied volumes?

A non-standard contract provides the client with flexible rights to offtake the quantity. During a certain period (especially summer period for gas) there is no delivery under the contract.

Page 20 of the TRUM and FAQ 3.1.1 requires to report update messages of the table 2 contract as soon as the market participants are aware about the “outright volume and price for transactions executed within the framework of non-standard contracts”. This does not explicitly refer to positive volumes. Our interpretation is that also periods without delivery should be reported to ensure that a report for all periods is available. But this would lead to zero values for field 41 of the execution messages which might be contradicting to the opinion of the open letter.


Answer:

Market participants should report the delivered energy as indicated in the execution report. When there is no delivery, there is no need to report execution.

However, where the framework of a non-standard contract allows for the sale and purchase of energy under the same contract, market participants should NOT net those EXECUTIONS, as they may in some circumstances lead to 0 (zero) volume at the end of the month.

Market participants should report the sold and bought volumes separately with different EXECUTIONS reports.

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FAQs on transaction reporting – Question II.3.5.1

What happens if an event has been reported with an error?

Do we have to send a first report with “Error” and then a second one with “New” or another status?

Do we still have to send the report no later than one working day after the sell for the standard contract (than one month after the invoicing for the non-standard contract)?


Answer:

When a wrongly submitted trade needs to be cancelled, then an “error” report should be submitted to the Agency. No other reports shall be sent or re-sent (such as the original one). For the reporting of lifecycle events, the same timeline for the first report applies.

If a “new” report is due to be reported on T+1 basis, all of the life cycle events related to that report have to be reported on a T+1 basis. If a “new” report is due to be reported on T+1 month basis, all of the life cycle events related to that report have to be reported on a T+1 month basis. Examples of “modification”, “early termination” and “error” reports are available in Annex II to the TRUM (e.g. examples 4.51 to 4.54).

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FAQs on transaction reporting – Question II.3.5.2

What does the status “Cancel” (Lifecycle information) mean exactly for a contract? The contract has been cancelled or the energy delivery is completed?

Moreover if a supplier went bankrupt (for example) before the delivery starts, how can we report this? A new report with “Cancel” or only in “EXECUTION” (contract name) reporting in the case of a non-standard contract?


Answer:

The status “cancel” in “Action Type” data field No. 45 of Table 2 indicates the termination of an existing contract. “Cancel” should be used to indicate that the market participant or the execution venue has removed the order transaction from trading or, when a contract is terminated before the original end date.

If a supplier went bankrupt either before the delivery starts or after delivery has begun and an early termination of the contract takes place, then a “Cancel” report for the non-standard contract already reported with Table 2 has to be reported to the Agency indicating the date of cancellation. (Please see example 4.53 of cancellation of a standard contract in Annex II to the TRUM.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.5.3

Same question for “Modify” (Lifecycle information). Do we only have to send a new report as soon as there is a new action such as change of volume, price or counterparty (novation)?


Answer:

The first submission of a transaction to the Agency of a bilateral contract is an event which will be identified as “new”. Any modification of the previously submitted report has to be notified to the Agency and reported as “modify”. An example of report modification is when two parties agree to amend one or more terms of the original agreement (e.g. price, quantity or any other value previously reported). Please see example 4.51 in Annex II to the TRUM.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.5.4

Reference to Article 7 of the Implementing Acts.

Details of non-standard contracts including any modification or the termination of the contract and transactions referred to in the second subparagraph of Article 5(1) shall be reported no later than one month following the conclusion, modification or termination of the contract.

1)  In case of trade modification after end of delivery date, is there reporting obligation for market participants under REMIT?

2)  Would ARIS accept modification on a deal after end of delivery date? Is there any special process or guidance, which needs to be followed by Market Participants?

Business Case: Market Participant A is invoicing monthly settlements as part of standard processes. Occasionally a correction of settlement is required, due to price/volume adjustments or data collected by third party provider. In consequence, an existing invoice might need to be corrected or a new invoice generated relating to a previous period. It can be that such invoice correction / new invoice generation occurs after end of the delivery period.


Answer:

In the REMIT transaction reporting regime, nothing prevents a market participant from amending a report after the end of the delivery period.

The Agency recommends market participants to consider an amendment to the execution 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.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.5.5

This question is related to intraday lifecycle events for Phase 2 Reporting.

When two companies have agreed a bilateral non OMP standard or non-standard contract, there is the possibility that once agreed, the volumes and/or values may change several times during the day until the end of the business day. At the end of the business day, the contract is considered binding and finalised volumes and values recorded accordingly.

Is it acceptable to report the final transaction details as a single new trade report or do you need to have the initial new and subsequent modifications to the trade reported?

Also, it may happen that after several modifications to the initial contract, it is cancelled at the end of the business day, so is it acceptable to report the trade as New and then Cancelled without reporting the modifications?”

“Example 1

Company A and Company B agree a bilateral contract at 10:00 of 1,000 units at a price of €50 per unit for a next day delivery.

During the course of the day the number of units and/or the price agreed changes several times as follows…

11:00 – 1,100 units at €49 per unit

13:30 – 1,000 units at €50 per unit

15:15 – 900 units at €50.50 per unit

17:00 – 750 units at €51.35 per unit

At the end of the business day a final agreement of 750 units and a price of €51.35 is made and contracted to.

Example 2

Company A and Company B agree a bilateral contract at 09:00 of 500 units at a price of €55 per unit for a next day delivery.

During the course of the day the number of units and/or the price agreed changes several times as follows…

10:00 – 600 units at €52.50 per unit

12:00 – 450 units at €56 per unit

17:00 – Contract cancelled

At the end of the business day the contract is cancelled.


Answer:

Based on the information provided above, life cycle events of a trade agreed at 10:00 am have to be reported as such. If during the course of the day the number of units and/or the price agreed change several times including the cancellation of a contract, they should be reported as life cycle events.

RSS_Icon Last update: 26/09/2016  

FAQs on transaction reporting – Question II.3.5.6

We experienced several novations in the past and were confronted with different proposals on how to report such events to ACER. Could you please further specify the different data fields which need to be populated?

Could you please provide more clarity about the precise reporting requirements in case of novation? What values have to be reported?

Supply contract for gas for 1.4.16-1.4.17 was concluded on 15.02.2016. Novation agreement was signed on 15.12.2016 with effective date on 01.01.2017.

For the old transaction the following scenarios are possible:

Scenario Start of delivery End of delivery Contract date Termination date Event
(fields table 1 / 2) (# 49 / # 42) (# 50 / # 43) (#30 / #12) (#43 / – ) (# 58 / #45)
Reported 1.4.16 1.4.17 15.2.16   NEW
A 1.4.16 1.4.17 15.12.16 1.1.17 Cancel
B 1.4.16 1.1.17 15.12.16 1.1.17 Cancel
C 1.4.16 1.1.17 15.12.16   Modify

 

For the reporting of the new contracts the following scenarios are possible:

Scenario Start of delivery End of delivery Contract date Event
(fields table 1 / 2) (# 49 / # 42) (# 50 / # 43) (#30 / #12) (# 58 / #45)
I 1.4.16 1.4.17 10.2.16 NEW
II 1.4.16 1.4.17 15.12.16 NEW
III 1.1.17 1.4.17 10.2.16 NEW
IV 1.1.17 1.4.17 15.12.16 NEW

 


Answer:

All the open trades have to be novated with the name of the new legal entity to notify the change of the counterparty to the contract. In order to report a novation, an early termination with the old UTI and a new trade with a new UTI should be reported.

Both market participants, MP1 and MP2 have to submit an early termination report with Action Type “C” to cancel the old trade and MP1 and MP3 have to provide a new submission with Action Type “N” for the new trade between MP1 and MP3 with a new UTI. In addition:

  • The early termination should be reported with the timestamp/contract date of the early termination agreement day.
  • The termination date refers to the date the contract ceases to exist, and not the agreement date (timestamp/contract date, see above).
  • “Modify” should not be used.

RSS_Icon Last update: 08/12/2017  

FAQs on transaction reporting – Question II.3.5.7

FAQ Question 3.1.17 states that for a Phase 2 reports in the Table 1 format that a change in UTI may be implemented through a modification of the existing report using either the <previousUniqueTransactionIdentifier>  for the Version 1 schema or the < additionalUtiInfo> field in the case of the Version 2 schema. The following question has been raised: For Table 1 Phase 2 reports is this process mandatory, or can the Phase 1 Table 1 process of erroring out the first report and resubmitting a new report with a new UTI (without a link to the previous UTI) be used as an alternative process?

Practical example: a new Phase 2 Table 1 report is successfully submitted by an MP but subsequently they wish to correct the UTI after discussion with the counterparty. They submit a report for that UTI with ActionType = “E” and they then submit a new report for the same deal with a new UTI (matching the counterparty’s UTI) with ActionType = “N”, they do NOT include any information about the original report or its UTI in the newly submitted report. Is this an acceptable process for correcting the UTI?


Answer:

Market participants should clearly distinguish the Error “E” from the Modification “M” case. As indicated in the TRUM, “E” for Error should be used to denote a cancellation of a wrongly submitted report, while “M” for Modification should be used for the modification of the details of a previously reported contract.

In order to correct the UTI that was wrongly submitted, the original report needs to be cancelled with Action type “E” and a new report with a new UTI (matching the counterparty’s UTI) has to be submitted for the same deal with Action type “N”. The new report does not have to include any information about the original report or its UTI, since the original report was wrongly submitted in the first place.

However, with regard to Question 3.1.17 of the FAQs on REMIT transaction reporting, if a market participant’s counterparty provides the UTI after T+1 day or T+1 month, or alternatively not at all, the market participant who is reporting its reports should submit a temporary UTI. Once they have received the UTI from their counterparty, a ‘Modify’ report should be submitted to modify the previous report, recalling the old UTI.

If a report is due to be reported on a T+1 day basis, all life cycle events related to that report have to be reported on a T+1 day basis. Otherwise, if a new report is due to be reported on a T+1 month basis, all life cycle events related to that report have to be reported on a T+1 month basis. Examples of ’modification‘, ’early termination‘ and ’error‘ reports are available in Annex II to the TRUM.

RSS_Icon Last update: 20/07/2018  

FAQs on transaction reporting – Question II.3.6.1

About outstanding contracts, a financially settled Derivate transaction ending the month of March 2016, for example a Fix-for-Floating API2 Swap, has an outstanding financial flow due to be invoiced on the 5th working day of April (7 October 2015 – Reporting Start Date). However, as the financial settlement amount is fixed on the final pricing day in September it does not count as an outstanding contract to be back-loaded under REMIT.

Yet the same contract for a different Commodity would indeed have an outstanding financial flow, as there is a time lag in the publishing of the fixing prices meaning the settlement fixing price for March 2016 would not be published until the end of April 2016, and would therefore fall under the back-loading rule.

Regardless of the fact that we would be reporting these derivative contracts under EMIR and will not be double reporting under REMIT are these assumptions correct in ACERs view?

About outstanding contracts, we have an EFET General Agreement Gas with a Counterparty and have concluded an individual contract under the General Agreement with that counterparty for the delivery of Natural Gas in Gas Year 2014/2015 via an Energy Broker OMP (physical delivery from 01.10.2014 06:00 to 01.10.2015 06:00).

The payment terms are contractually agreed in the General Agreement according to § 13.1 Invoice and § 13.2 Payment (20th of the month following delivery), and are also confirmed on the individual contracts.

Therefore, the wholesale energy contract does not have an outstanding physical flow. However, the “financial flow” (Settlement) is contractually agreed and due on 20 October 2015 and hence outstanding.

Nonetheless, as I understand your answer in the FAQs, this would not count as an outstanding financial flow but merely as the settlement of the invoice date (despite the fact that it has been contractually agreed in advance) and is not relevant for REMIT Backloading.

The same rule should apply for Spot delivery contracts with a physical delivery ending 07.10.2015 00:00. Also correct?


Answer:

In the above question, a Fix-for-Floating API2 Swap seems to mean a swap on coal, which falls outside the scope of REMIT.

However, any contract related to the supply of gas or electricity, irrespective if it is a physical forward, a future or an option, has a reference to a delivery period. Also financial derivatives related to EU gas or electricity have a reference price which relates to a delivery period of the commodity.

For physical trades, the gas or electricity delivery period of the commodity is the one that should be observed. Any contract that considers a delivery of EU gas or electricity after 7 October 2015 (Phase 1) or 7 April 2016 (Phase 2) should be considered an outstanding contract and would fall under the back loading rules.

For example a physical forward that delivers electricity from 1 April to 30 Aril 2016 would be considered an outstanding contract on 7 April 2016. The same applies to any contract for the delivery of the energy commodity after 7 April 2016 irrespective of the financial settlement of the invoice. A contract for the delivery from 1 March to 31 March 2016 with a financial settlement of the invoice after 7 April, should not be considered subject to back loading.

The same applies to financial derivatives related to EU gas and electricity. A monthly future on gas or electricity that settles in cash (a financial derivative) does so against a cash flow/a series of cash flows in a particular month. That month, or any other period of time covered by the instrument, is the one that has to be taken into consideration for the calculation of the exchange of cash flows.

On the contrary, the point of time when the payment between the two parties really takes place, e.g. 20 days after the delivery period that the contract refers to, is not taken into consideration for the purpose of considering a contract subject to the back loading rules.

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