What is REMIT?
Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (REMIT), was published in the Official Journal of the European Union on 8 December 2011 and entered into force 20 days following its publication, i.e. on 28 December 2011. REMIT introduced, for the first time, a consistent EU-wide framework:
• defining market abuse, in the form of market manipulation, attempted market manipulation and insider trading, in wholesale energy markets;
• introducing the explicit prohibition of market manipulation, attempted market manipulation and insider trading in wholesale energy markets;
• establishing a new framework for the monitoring of wholesale energy markets to detect and deter market manipulation and insider trading; and
• providing the enforcement of the above prohibitions and the sanctioning of breaches of market abuse rules at national level.
REMIT prohibits market manipulation and trading on inside information in wholesale energy markets. The definitions of market manipulation and insider trading in REMIT are in line with those applying under Directive 2003/6/EC (Market Abuse Directive or MAD), though adapted for wholesale energy markets. The prohibitions of market manipulation and insider trading in REMIT does not apply to wholesale energy products which are financial instruments and to which Article 9 of MAD applies.
REMIT regulation is available here: https://www.acer-remit.eu/portal/custom-category/remit_doc.
Last update: 08/01/2016
Who has obligations under REMIT?
All entities and persons who participate in, or whose conduct affects, wholesale energy markets within the Union should be compliant with REMIT. It makes no difference whether or not the person is resident within the EU or whether or not they are professional investors. Also non-EU and non-EEA market participants are covered by REMIT if entering into transactions, including the placing of orders to trade, in one or more wholesale energy markets in the Union. Accordingly, the obligations to register under REMIT with the competent NRA and to report data to the Agency according to Article 8(1) and (5) of REMIT also applies to such non-EU and non-EEA market participants. The same holds for the prohibitions of market abuse pursuant to Articles 3 and 5 of REMIT.
Last update: 17/12/2014
What are the benefits of greater transparency in wholesale energy trading?
Wholesale energy markets provide key price signals which affect the choices of producers and consumers, as well as investment decisions in production facilities and transmission and distribution infrastructure. It is therefore essential that these signals reflect a fair and competitive interplay between supply and demand, and that no profits can be drawn from market abuse.
Greater transparency in wholesale energy markets reduces the risk that markets are manipulated and the price signals distorted. Transparency in wholesale energy markets is thus crucial in ensuring that consumers pay the fair price for their gas and electricity. It also helps creating a level-playing field for all market participants.
Last update: 20/12/2011
Why is the EU framework for wholesale energy transparency and integrity necessary?
Wholesale energy markets in Europe are increasingly interlinked across the Union in that market abuse in one Member State can affect the price of energy in other Member States.
When REMIT came into force, only a few Member States had organised the monitoring of the wholesale energy markets within their own borders, trading venues often had no clear prohibition of market abuse. Most of the transactions were not reported and fundamental data was not accessible to NRAs. Therefore, the European Union judged it essential to set up a dedicated market integrity and transparency framework at Union level for the gas and electricity wholesale markets.
Last update: 20/12/2011