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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.1.1.14

In what format and timeframe should bilaterally traded profiled gas contracts be reported?

The Profiled gas contract is the same gas consumption every hour of the day within one month, however, months can differ.  Example: Company X sells 47,251 MWh GLP H @ €24.03 to counterparty ‘XYZ’. The gas consumption profile can be shaped over the year so gas is only delivered on selected months. Invoicing occurs each month after delivery.


Answer:

Profiled gas contracts with a defined price and quantity should be reported with Table 1. The reporting timeline depends on where the trade takes place. If the trade is executed through an Organised Market Place (Broker platform/ or Voice brokered), the trade is considered a standard contract and should be reported on a T+1 working day basis.

If the trade is executed bilaterally off-market, then the trade is considered a non-standard contract and should be reported on a T+1 month basis, still with Table 1.

If the gas consumption profile can be shaped over the year so that gas is only delivered on selected months after the conclusion of the contract (there is no defined quantity in the contract but a possible range or optionality), then the contract itself has to be reported with Table 2 on a T+1 month basis and the monthly executions will have to be reported not later than 30 days after the discovery of price and quantity with Table 1. Please see Annex II of the Transaction Reporting User Manual (TRUM) for additional details.

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FAQs on transaction reporting – Question II.1.1.15

Reporting complete transaction, in this scenario:

  • 2 counterparties agree a bilateral trade, type standard contract, with hourly quantities for a delivery day several days ahead;
  • the agreed price is the X market place prices for this delivery day; prices issued by the X market place, only the day before the delivery day.

According to the ACER document “REMIT – Transaction Reporting User Manual”, §3.2.6, both counterparties report the trade only the day before the delivery day, once the prices are known (transaction complete). Is that correct?


Answer:

If two counterparties agree a bilateral trade, type standard contract, with hourly quantities for a delivery day several days ahead and they agree a “X market place price” for this delivery day when the price issued by the X market place is published the day before the delivery day, they should report the contract with the index which fixes the price (e.g. X market place prices) on a T+1 working day basis.

If the contract is a non-standard contract this has to be reported on aT+1 month basis and therefore by the time of the reporting the price and the quantity are known and the contract can be reported as a non-standard contract with Table 1 on a T+1 month basis.

Alternatively, if the market participants report the non-standard contract before the delivery and the publication of the price, the contracts can be reported in two phases: the non-standard contract with table 2 indicating the index which fixes the price (e.g. X market place prices) and an execution under that non-standard contract,  both on a T+1 month basis.

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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.1.1.17

Can you please clarify if the EMIR approach to Novations will be applied.

Scenario 1: Trade being fully novated

Will we be required to send a cancel/ exit for the trade (old UTI) against pre novation party and a ‘new’ submission for the trade (New UTI) against the new party? i.e. same UTI cannot be used post novation

Scenario 2: Trade to be split by Novation

Will we be required to send a modify (old UTI) for the trade remaining with the original party and a ‘new’ for the trade (New UTI) with new party?


Answer:

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” for Cancel the old trade and e.g. MP1 and MP3 a new submission with Action Type “N” for the new trade between MP1 and MP3 with a new UTI.

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FAQs on transaction reporting – Question II.1.1.18

All standard contracts have to be reported on a T+1 basis independent of the market they were traded on (OMP or OTC). Since there is no implementation period transactions have to be reported instantly in case a non-standard contract becomes part of that list on a T+1 basis (instead of a T+30 basis). It is not possible for market participants to change the infrastructure for reporting in one day to become compliant.


Answer:

When a contract previously reported as non-standard contract is admitted to trade at an organised market place we do understand that market participants may need some time before they are able to report their transactions on a T+1 day basis rather than on a T+1 month basis.

In this case market participant should make their best efforts to minimise the time they need to start reporting the contract on a T+1 day basis.

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