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FAQs on transaction reporting – Question II.3.3.1

I would like to discuss another trading example and ask you how to report it. Below you’ll find my reporting proposal.

Scenario:

  • buy, “strip of daily option”, gas, bilateral, physical settlement, price 0,5 €/MWh,
  • total deal volume 27.000 MWh within three month (December – February), exercising the option is just possible at 15 days per month on a day ahead basis,
  • December quantity 0-20 MW, volume = 7.200 MWh,
  • January quantity 0-25 MW, volume = 9.000 MWh,
  • February quantity 0-30 MW volume = 10.800 MWh,
  • strike price 30 €/MWh.

Could you please help me in that case?


Answer:

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

Our understanding is that the option described above can be reported with Table 2 as a non-standard contract. Its executions shall be reported with Table 1.

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.

RSS_Icon Last update: 10/07/2017  

FAQs on transaction reporting – Question II.3.3.2

Reference to:

  • Article 3(1) of the Implementing Acts. List or reportable contracts: Options, futures, swaps and any other derivatives of contracts relating to electricity or natural gas produced, traded or delivered in the Union.
  • Option Details from ANNEX “Details of Reportable Contracts” in the Implementing Acts: Tables 1 and Table 2
  • TRUM, Table 1 #44: Option Exercise Date

“A European style option can only be exercised at the maturity date.”

  • TRUM, Table 1 #46: Option Exercise Date:

“This field identifies the date at which the option holder has the right, but not the obligation, to buy or sell the commodity or underlying instrument at a specified price on or before a specified date. In the case of an American, European or Asia option style, one exercise date is reported. In the case of a Bermudian option style, several dates may be reported.”

The issue:

1)  How should market participants report strip options?

2)  What is the reporting guidance from ACER for fields #44 Option Style and #46 Option Exercise date (Table 1) in regards to strip options? According to TRUM guidance, only Bermudian options can have more than one exercise date. For European option style, only one exercise date is required to be reported based on same text in TRUM.

Example:

Business Case: Market Participant A is trading strip options European style.

According to Market Participant A’s perspective, a strip option of the European style is a series of vanilla European options (a series of European puts or a series of European calls) on a number of consecutive contracts (e.g. January, February and March), each with the same strike price, but with a different expiry date.

Example: A strip option is concluded for delivery in January/February/March (three consecutive months). There are three exercise dates; each exercise date is two days before delivery start (e.g. 29th of December for delivery in January, 30th of January for delivery in February, 27th of February for delivery in March). Market Participant A has the right, but not the obligation, to exercise the option with delivery for January on 29th of December. In line with that, on 30th of January Market Participant A has the right, but not the obligation to exercise the option for delivery for February with the same strike price, and the same for delivery in March.

According to our current interpretation strip options are a kind of concatenated European style options, thus our interpretation is the report in the following manner:

  • Field #44 Option Style: Report as “European option style”
  • Field #46 Option Exercise Date: Report all relevant exercise dates of the strip option in this field, i.e. not just one exercise date as per the existing ACER guidance.

We would be grateful for ACER’s views on this envisioned approach, please.


Answer:

[UPDATED] to clarify Option Style of strip options

[Added] Since the introduction of the validation rule 2AODOEDR2x (in June 2017) – which prevents the reporting of records with a Contract Delivery Start Date prior to Contract Option Exercise Date unless the Option Style is ‘O’ for Other – strip options should be reported with Option Style ‘O’.

We understand that the option described above can be reported as:

  • Field #44 Option Style: “Other” “European option style”
  • Field #46 Option Exercise Date: the field should be repeated three times, where each value corresponds to a different exercise date, relevant to the individual delivery period (see below)
  • Fields #49 and #50 Delivery Start/End Date: these two fields should also be repeated three times, once for each corresponding delivery period (in this case it is one month per each delivery period).

The example below clarifies further the way to report the three fields above.

faqs-on-transaction-reporting-question-ii-3-3-2-table

RSS_Icon Last update: 20/07/2018  

FAQs on transaction reporting – Question II.3.3.3

The issues relate to interpretation of the REMIT transaction reporting obligations with respect to our role, as an energy supplier within XX country, in contracting with end users.

Below is a high level summary of the types of contracts we enter into with end-users along with assumptions we are making and points of clarification we are seeking.

Fixed Price Supply Contracts:

Fixed price supply contracts include a commodity component within the unit rates charged for energy. This component is typically determined by the wholesale market price on the day of contract acceptance. Such “transactions” are understood to be in scope of REMIT transaction reporting obligation subject to the following:

  1. reportable only where the contract includes 1 or more sites with the capacity to consume more than 600GWh annually;
  2. it is the end users obligation to inform us, their supplier, if any of the contracted sites exceed this capacity limit.

Reportable in the non-standard format as:

  1. volume is not necessarily explicitly stated and, where it is, is an indication rather than a commitment to supply or consume the stated quantity;
  2. price is a tariff structure with rates including a number of both commodity & non-commodity (e.g. margin) components.

Reportable from Apr 16 and within 28-days of contract execution

Where the supply contract does not include any sites that meet criteria 1. (above) but the end user is a registered Market Participant, contracts are not deemed to be reportable

Flexible Supply Contracts:

Larger consumers within the I&C market for both gas & electricity, along with embedded generators (wind/solar farms, energy from waste producers) have an appetite to spread their risk over a period of time, rather than fixing 100% of their commodity costs on a single day.

To support this requirement XX energy supplier provides a variety of “Flexible” supply product offerings which allow customers to fix their energy price via a series of “price fixing” transactions for individual seasons, quarters, months, weeks, days (or even HH’s at their most granular level).

These transactions are conducted with the end user under the terms of their supply contract. They are not conducted under NBP97 or GTMA terms, nor are they conducted over a regulated market (MTF).

We are unclear as to the extent of the transaction reporting requirement for these types of contracts.

It is assumed the supply contract itself is reportable under the same criteria as a Fixed Price Supply Contract outlined above. If possible could you clarify which, if any, price fixing transactions would need to be subsequently reported? And whether these should be treated as non-standard also?


Answer:

In Section (2) of Annex II of the Transaction Reporting User Manual (TRUM) there are examples of transaction reporting for both standard and non-standard contracts including examples of non-standard contracts to be reported with Table 2 in the Annex of the REMIT Implementing Regulation (EU) No 1348/2014, and examples of executions under the framework of non-standard contracts reportable with Table 1 of the same annex.

In Annex II of the TRUM it is also available guidance on the timing of the reporting of standard and non-standard contracts as well as executions under non-standard contracts.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.3.4

How should bilaterally traded contracts (with a floating price) and an option to fix the price be reported, once the fixing has been executed by the buyer?

Should the price fixing event be reported as lifecycle event update to the existing contract, or instead reporting the fixing as a separate ‘new’ contract?

Company X sells 20MW/h +/-10% Q116 gas to counterparty ‘XYZ’ @ TTF + 2 and counterparty ‘XYZ’ decides to fix 10MW/h Q116 at 24.  We then invoice each month 10MW/h at 24 and leftover consumed gas at arithmetic average of daily TTF quotations +2.


Answer:

Please see Annex II to the TRUM. In Section 2 of the annex there are several examples on how to report bilaterally traded contracts (with a floating price) and an option to fix the price that is being reported, once the fixing has been executed by the buyer.

For any of above types of optionality, such as the daily flexibility, there is no expectations of reporting on a daily or individual basis, but on an aggregated basis according to the guidance provided in Annex II to The TRUM.

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FAQs on transaction reporting – Question II.3.3.5

Regarding the reporting of transactions with big energy consumers, does the exercise of a contractual right of a transaction already registered (e.g a “price switch” clause which allows the customer to modify the contractual price formula for part of offtaken quantities and contractual period) generate a new duty of reporting?


Answer:

Please see Annex II to the TRUM. In Section 2 of the annex are several examples on how to report bilaterally traded contracts (with a floating price) and an option to fix the price that is being reported, once the fixing has been executed by the buyer.

For any types of optionality, such as the daily flexibility, there is no expectations of reporting on a daily or individual basis, but on an aggregated basis according to the guidance provided in Annex II to the TRUM.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.4.1

Modification of Execution events. When we are sending an execution event in Table1 that links to a trade in Table2 the examples say that the UTI of those events is “NA”.

This would work for the New event.

What would we do if there is the need to modify an execution event if there is no unique ID on the original “New” record?


Answer:

The Agency has received additional input from its stakeholders who raised the issue of the modification of the EXECUTION report. They suggested to allow for the reporting of a unique number in the UTI field in case of modification.

Please note that for the purpose of the reporting of the details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price and reportable with Table 1 of the Annex to the Implementing Acts, the examples presented in Annex II to the TRUM have been modified to reflect the input provided by the industry to the Agency.

In particular, the Agency’s stakeholders have highlighted and requested the need to assign a unique number to the each execution reports in Field (31) Unique Transaction ID of Table 1.

This requirement makes sure that in case it is needed to report a modification report this can be submitted to modify a previously reported execution uniquely identified in Field (31) Unique Transaction ID of Table 1.

The Unique Number can be any number the market participant likes as long as it is unique for that market participant and not used for other executions. It could be, for example, any progressive unique number for the market participant who is reporting the execution.

There is no expectation that the buyer and seller unique number for the execution will have to be the same. This is a unique number that will identify the report uniquely.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.4.2

What UTI should be reported for the reporting of EXECUTIONS where the Market Participant does not have a UTI for the trade?

Example: Prior to Oct 7, participant enters into a trade. No UTI is assigned to the trade. Trade is still open on Oct 7 and therefore needs to be reported as a back loaded trade.

The Market Participant may omit the UTI for such trades.


Answer:

The UTI is a mandatory field in the schema. For executions under the framework of non-standard contracts where the market participant does not have an UTI for the trade, the market participant should create one.

The UTI is needed for the ID of the record, otherwise the market participant will not be able to make any amendments and/or recall the transaction.

The UTI can be anything the market participant would like to submit e.g. the transaction ID available in their system.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.4.3

We need to understand how quantity data for Non-Standard Contracts are required for transaction reporting according to REMIT.

We act as Direct Marketer in Germany with a portfolio of wind and solar based virtual power plants. Typically these PPAs are agreed with a 1-2 year duration. We just purchase from the power plant operator the whole production based on actual values.

When we sign the contract we need to report such a new deal with Action Type New and Quantity field empty (because the actual values are not available yet. The actual values are available from the DSOs (around 99% completeness) until 10 working days after each delivery month, and they are usually available with 100% completeness before the Balance Circle Agreement (8 months after delivery month).

The question is now when we need to report modified transactions for these PPAs and based on which data? Shall we report each month the actual values of the previous delivery month even if they are not yet complete?

Another question is the 30 day rule. Is the obligation to report the transaction within 30 days only related to new transactions (Action Type new) or also related to any modifications later on?

Further question regarding Field 41 Delivery Area: What should be represented by this Y EIC Code – the TSO area (which is a 16 digits Y Code) or the DSO Delivery area (which is a 16 digits Y Code as well). I´m already sure the balance circle of the Balance Responsible is not meant as this a 16 digits X Code.


Answer:

For the purpose of the reporting of the details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price, reportable with Table 1 of the Annex to the REMIT Implementing Regulation (EU) No 1348/2014, the Agency understands that these transactions should be reported according to the billing cycle industry standards as the invoicing date is the last point in time that price and quantity can be discovered.

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 not later than 30 days after the discovery of price and quantity. Although the actual values are available from the DSOs, the Agency currently would not expect any life-cycle event based on actual values available from the DSOs.

With regard to the timing of the reporting,  if a “new” report is due to be reported on T+1 basis, all 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 the life cycle events related to that report have to be reported on a T+1 month basis.

With regard to the second part of the question, as indicated in the TRUM, Field 41 Delivery Area identifies the commodity delivery point or zone. In this specific case, the delivery area is the TSO EIC Y code of the balancing area for which the market participant has a balancing agreement with the TSO. This is the area where the market participant delivers the energy commodity through nominations/scheduling.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.4.4

In our opinion the transaction executed under the framework of a non-standard contract (paragraph 3.2.6 of the TRUM in the separated box), is the inception of the contract itself (i.e. signature of the contract) or contractual amendments issued. On the contrary the specific lifecycle events that occur after the signature (e.g. price switch, additional quantities) are the mere exercise of a contractual right. Could you confirm it?


Answer:

In the Agency’s view the explanation in paragraph 3.2.6 of the Transaction Reporting User Manual (TRUM) in the separated box is clear: each exercise of the contractual right is a reportable transaction.

RSS_Icon Last update: 16/02/2016  

FAQs on transaction reporting – Question II.3.4.5 [DELETED]

The question was deleted due to duplication.

RSS_Icon Last update: 20/07/2018  

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