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.5.5.

What happened in the interim phase between REMIT’s entry into force until the adoption of the REMIT implementing acts?


Answer:

Since the monitoring activities under REMIT are based on the collection of trade and fundamental data in accordance with Article 8 of REMIT and the relevant implementing acts, the Agency’s market monitoring activities in the interim phase – i.e. until the entry into application of the REMIT implementing acts – relied on notifications of suspected breaches of REMIT from NRAs and from persons professionally arranging transactions and on public sources.

NRAs were able to request wholesale energy data in ad-hoc cases on the basis of the record-keeping obligations for market participants. This was particularly the case if a potential infringement of the prohibitions of market abuse signalled by a person professionally arranging transactions according to Article 15 of REMIT or by a market participant. NRAs had to inform the Agency about any such cases signalled to them.

RSS_Icon Last update: 09/02/2014  

Q&As on REMIT – Question II.5.1.

When did REMIT come into force and into application?


Answer:

REMIT was published in the Official Journal of the EU on 8 December 2011. On 28 December, the prohibitions of insider trading and market manipulation, the obligation for market participants to publish inside information and the obligation for persons professionally arranging transactions to establish and maintain effective arrangements to detect market abuse and to notify reasonable suspicious cases to national regulatory authorities came into force.

Within 6 months of the entry into force of REMIT, i.e. by 28 June 2012, the Agency determined a format for the registration of market participants, and within 18 months, i.e. by 28 June 2013, Member States should have assigned investigatory and enforcement powers to NRAs and put in place rules on penalties applicable to infringements of REMIT.

RSS_Icon Last update: 20/12/2011  

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.5.4.

When and where do market participants have to register?


Answer:

No later than three months after the date on which the Commission adopts the implementing acts, NRAs shall establish national registers of market participants which they shall keep up to date, so that at the latest by then, the registration of market participants starts.

According to Article 9(4) of REMIT, market participants shall submit the registration form to the national regulatory authority prior to entering into a transaction which is required to be reported to the Agency in accordance with Article 8(1).

RSS_Icon Last update: 20/12/2011  

Q&As on REMIT – Question II.1.3.

What are the benefits of greater transparency in wholesale energy trading?


Answer:

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.

RSS_Icon Last update: 20/12/2011  

Q&As on REMIT – Question II.1.4.

Why is the EU framework for wholesale energy transparency and integrity necessary?


Answer:

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.

RSS_Icon Last update: 20/12/2011  

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  

Q&As on REMIT – Question II.5.6.

When will breaches of REMIT be sanctioned?


Answer:

Rules on penalties applicable to infringements of REMIT have to be stipulated by Member States in national law. Within 18 months following the entry into force of REMIT, i.e. by June 2013 at the latest, Member States should have empowered their NRAs with the necessary means and powers to investigate suspicious cases under REMIT.

However, already with the entry into force of REMIT, trading venues may have foreseen the sanctioning of market participants in breach of market abuse rules under REMIT and market participants may seek the protection of their interest through the courts in case of breaches of market abuse rules under REMIT by other market players.

RSS_Icon Last update: 20/12/2011  

Q&As on REMIT – Question II.2.1.

What is the role of the Agency under REMIT?


Answer:

The Agency for the Cooperation of Energy Regulators plays a central role in the monitoring framework under REMIT.

As recognised in REMIT, the Agency is best placed to carry out efficient market monitoring at Union level as it has both a Union-wide view of electricity and gas markets, and the necessary expertise in the operation of electricity and gas markets and systems in the Union. Therefore the Agency has been tasked with collecting and screening wholesale market transaction data across the EU and performing an initial assessment of anomalous events, before notifying suspicious cases to NRAs for investigation.

 

RSS_Icon Last update: 20/12/2011  

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