Q&As on REMIT – Question II.3.3.

Who is considered an insider?


Answer:

According to Article 3(2) of REMIT, the prohibition of insider trading applies to the following persons who possess inside information in relation to a wholesale energy products (insider):

• members of the administrative, management or supervisory bodies of an undertaking;

• persons with holdings in the capital of an undertaking;

• persons with access to the information through the exercise of their employment, profession or duties;

• persons who have acquired such information through criminal activity; and

• persons who know, or ought to know, that it is inside information.

RSS_Icon Last update: 20/12/2011  

Q&As on REMIT – Question II.3.4.

What are possible examples of market manipulation?


Answer:

The Agency’s non-binding guidance provides examples of the various types of practices which could constitute market manipulation and which are inspired by European energy regulators’ own experiences and the experiences in financial markets. These can therefore be taken as indicating possible signals of market manipulation in wholesale energy markets according to REMIT. These considerations apply until more experience is gained about market manipulation in wholesale energy markets.

More generally, the Agency considers that market participants’ behaviour must be coherent with their technical and economic constraints in a way to comply with competition law, especially concerning market power exercise. The cooperation of the Agency and NRAs with the competition authorities, as foreseen by REMIT, must be understood in this respect. The Agency will review its Guidance on market manipulation and publish a revised Guidance if considered appropriate.

RSS_Icon Last update: 20/12/2011  

Q&As on REMIT – Question II.3.5.

Who is considered a market participant?


Answer:

Article 2(7) of REMIT states that a ‘”market participant” means any person, including transmission system operators, who enters into transactions, including the placing of orders to trade, in one or more wholesale energy markets.’

In its Guidance to NRAs, the Agency considers at least the following persons to be market participants under REMIT if entering into transactions, including orders to trade, in one or more wholesale energy markets:

• energy trading companies in the meaning of ‘electricity undertaking’ pursuant to Article 2(35) of Directive 2009/72/EC[1] carrying out at least one of the following functions: transportation, supply, or purchase of electricity, and in the meaning of ‘natural gas undertaking’ pursuant to Article 2(1) of Directive 2009/73/EC[2] carrying out at least one of the following functions: transportation, supply or purchase of natural gas, including LNG;

• producers of electricity or natural gas in the meaning of Article 2(2) of Directive 2009/72/EC and Article 2(1) of Directive 2009/73/EC, including producers supplying their production to their in-house trading unit or energy trading company;

• shippers of natural gas;

• balance responsible entities;

• wholesale customers in the meaning of Article 2(8) of Directive 2009/72/EC and Article 2(29) of Directive 2009/73/EC;

• final customers in the meaning of Article 2(9) of Directive 2009/72/EC and Article 2(27) of Directive 2009/73/EC, acting as a single economic entity, that have a consumption capacity of 600 GWh or more per year for gas or electricity. If the consumption of a final customer takes place in markets with interrelated prices, his total consumption capacity is the sum of his consumption capacity in all those markets;

• transmission system operators (TSOs) in the meaning of Article 2(4) of Directive 2009/72/EC and Directive 2009/73/EC;

• storage system operators (SSOs) in the meaning of Article 2(10) of Directive2009/73/EC;

• LNG system operators (LSOs) in the meaning of Article 2(12) of Directive 2009/73/EC; and

• investment firms in the meaning of Article 4(1) No 1 of Directive 2004/39/EC[3].

The crucial criterion for the assessment of whether a company is a market participant is the entering into transactions, including the placing of orders to trade, in wholesale energy markets.


[1] Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC.

[2] Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC.

[3] Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC.

RSS_Icon Last update: 17/12/2014  

Q&As on REMIT – Question II.3.6.

What wholesale energy markets and products are covered by REMIT?


Answer:

Wholesale energy markets include both commodity markets and derivative markets. The wholesale energy markets include, inter alia, regulated markets, multilateral trading facilities and over-the-counter (OTC) transactions and bilateral contracts, direct or through brokers.

REMIT applies to wholesale energy markets, which means any market within the Union on which wholesale energy products are traded.

According to Article 2(4) of REMIT, wholesale energy products means the following contracts and derivatives, irrespective of where and how they are traded:

a) contracts for the supply of electricity or natural gas where delivery is in the Union;

b) derivatives relating to electricity or natural gas produced, traded or delivered in the Union;

c) contracts relating to the transportation of electricity or natural gas in the Union; and

d) derivatives relating to the transportation of electricity or natural gas in the Union.

Contracts for the supply and distribution of electricity or natural gas for the use of final customers are not wholesale energy products. However, contracts for the supply and distribution of electricity or natural gas to final customers with a consumption capacity greater than 600 GWh per year shall be treated as wholesale energy products. Further guidance on the application of the definition of wholesale energy products is provided in the Agency’s Guidance to NRAs.

The prohibitions of insider trading and market manipulation under REMIT do not apply to wholesale energy products which are financial instruments and to which Article 9 of MAD[1] applies, i.e. wholesale energy products which are financial instruments admitted to trading on a regulated market in at least one Member State, or for which a request for admission to trading on such a market has been made, irrespective of whether or not the transaction itself actually takes place on that market. This exemption only applies to the prohibitions of insider trading and market manipulation. The REMIT obligations, data collection and monitoring apply to all kinds of wholesale energy products.


[1] Directive 2014/57/EU of the European Parliament and of the Council of 16 April 2014 on criminal sanctions for market abuse (market abuse directive, MAD).

RSS_Icon Last update: 17/12/2014  

Q&As on REMIT – Question II.3.7.

[** Question number changed to Q III.5.3. **]

RSS_Icon Last update: 22/10/2018  

Q&As on REMIT – Question II.4.1.

I am a market participant. What obligations do I need to fulfil as of 28 December 2011?


Answer:

As of 28 December 2011, with the entry into force of REMIT, market participants are subject to the obligation to (1) publish inside information in an effective and timely manner; (2) notify ACER and competent NRAs in case of delayed publication of inside information. The prohibition of market manipulation, attempted market manipulation and the prohibition of insider trading also came into effect as of 28 December 2011.

RSS_Icon Last update: 20/12/2011  

Q&As on REMIT – Question II.4.2.

I am a market participant. What obligations do I need to fulfil after Commission Implementing Regulation (EU) No 1348/2014 entered into force on 7 January 2015?


Answer:

After 7 January 2015, when Commission Implementing Regulation (EU) No 1348/2014 entered into force, market participants and third parties reporting on their behalf have to:

a) within nine months, i.e. by 7 October 2015, report transactions in wholesale energy contracts admitted to trading at organised market places and fundamental data from the ENTSOs central information transparency platforms; and,

b) within fifteen months, i.e. by 7 April 2016, report transactions in the remaining wholesale energy contracts (OTC standard and non-standard supply contracts; transportation contracts) and reportable fundamental data from TSOs, LSOs and SSOs.

Also, please note that market participants entering into transaction which are required to be reported to the Agency in accordance with Article 8(1) of REMIT and Commission Implementing Regulation (EU) No 1348/2014 are first obliged to register with the NRA in the Member State in which they are established or resident or, if they are not established or resident in the EU, in a Member State in which they are active. A market participant shall register only with one NRA. A list of all NRAs can be found here: https://www.acer-remit.eu/portal/ceremp.

RSS_Icon Last update: 18/08/2016  

Q&As on REMIT – Question II.4.3.

What is the obligation to disclose inside information?


Answer:

According to the general obligation under Article 4(1) of REMIT, market participants shall publicly disclose in an effective and timely manner inside information which they possess in respect of business or facilities which the market participant concerned, or its parent undertaking or related undertaking, owns or controls or for whose operational matters that market participant or undertaking is responsible, either in whole or in part.

Such disclosure shall include information relevant to the capacity and use of facilities for production, storage, consumption or transmission of electricity or natural gas or related to the capacity and use of LNG facilities, including planned or unplanned unavailability of these facilities. In its guidance to NRAs, the Agency provides its understanding of the notions of effective and timely public disclosure of inside information.

RSS_Icon Last update: 17/12/2014  

Q&As on REMIT – Question II.4.4.

How should market participants notify the Agency in cases of delayed disclosure of inside information?


Answer:

In order to assist market participants who are subject to the obligation to report delayed publication of inside information, the Agency provides a standard notification template, based on the experiences in financial markets, and recommends its adoption by all NRAs.

The Agency foresees to collect the notification of such delayed publication of inside information mainly electronically, especially when there are data standards relating to this information (e.g. for information to be published in accordance with Regulations (EC) No 714/2009[1] and (EC) 715/2009[2]). The relevant electronic notification template is available on via the Agency’s Notification Platform:  https://www.acer-remit.eu/portal/notification-platform.


[1] Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity.

[2] Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005.

RSS_Icon Last update: 17/12/2014  

Q&As on REMIT – Question II.4.5.

I am a person professionally arranging transactions. What obligations do I need to fulfil as of 28 December 2011 and how?


Answer:

As of 28 December 2011, with the entry into force of REMIT, persons professionally arranging transactions (e.g. energy exchanges and brokers) are obliged to (1) establish effective arrangements to identify breaches; (2) notify NRAs in case of reasonable suspicion of market abuse.

The Agency considers that it would assist those subject to the obligation to report suspicious transactions if there were a standard reporting format for doing so and therefore has developed an electronic template to report suspicious transactions to NRAs. The template is available via the Agency’s Notification Platform: https://www.acer-remit.eu/portal/notification-platform.

RSS_Icon Last update: 20/12/2011  

RSS_Icon Subscribe to this Category’s RSS