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.

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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.

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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.

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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.

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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).

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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.

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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.

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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.

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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.

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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.

 

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