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Q&As on REMIT – Question III.2.44.

Reasonable steps that a market participant has to undertake are stipulated in Article 11(2), third subparagraph, of Commission Implementing Regulation (EU) No 1348/2014 in order to verify the completeness, accuracy and timeliness of data which they submit through third parties to the Agency. Do these reasonable steps differ depending on the reporting channel that the market participant selects – i.e. OMP, RRM, etc.?


Answer:

The Agency’s understanding is that the only reporting channels for transactions executed at organised market places, including matched and unmatched orders under Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014, are the organised market places concerned, trade matching and trade reporting systems.

The aim of the limitation to the above-mentioned three reporting channels for reporting under Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014 is to ease the reporting for the market participants as specified in Recital 5 of Commission Implementing Regulation (EU) No 1348/2014: ‘’Since market participants cannot be expected to record such data with ease, matched and unmatched orders should be reported through the organised market place where they were placed or through third parties who are able to provide such information’’.

Taking into consideration Recital 5, it seems that the organised market place concerned and/or market participants can choose another organised market place, a trade matching and/or a trade reporting system, i.e. a third-party Registered Reporting Mechanism (RRM), to report data under Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014.

In the registration of market participants through NRAs, the reporting through the organised market place concerned is considered as the default solution for reporting of records of transactions, including orders to trade, to the Agency, according to Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014. This is based on the underlying principle of the REMIT reporting regime set in Article 8 of REMIT that the reporting obligations on market participants shall be minimised by collecting the required information or parts thereof from existing sources where possible.

As a consequence of data collection according to Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014 from organised market places as existing sources, the Agency believes that this will ensure a high degree of data quality.

Against this background, the reasonable steps a market participant shall take to verify the completeness, accuracy and timeliness of the data, which they submit through third parties, have to be distinguished depending on the reporting channel selected:

a) Reporting of wholesale energy products through the organised market place where the transactions were executed or the orders to trade were placed (‘organised market place concerned’):

The organised market place concerned, as an RRM, will have responsibility for the completeness, accuracy and timely submission of the data to the Agency according to Article 11(2) of Commission Implementing Regulation (EU) No 1348/2014 itself. Since the organised market place concerned is the existing source, it is difficult to imagine any additional steps market participants could take to verify the completeness, accuracy and timeliness of the data which they submit through the organised market place concerned. Accordingly, the market participant selecting the organised market place concerned for data reporting according to Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014 will be relieved from taking reasonable steps to verify the completeness, accuracy and timeliness of the data which organised market places concerned submit as RRMs on their behalf to the Agency to the minimum necessary.

b) Reporting of wholesale energy products through a third-party RRM selected by the organised market place concerned:

The same as above applies if the organised market place concerned selects a third party RRM and thereby outsources the service for market participants of data reporting according to Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014 to the Agency. Since the organised market place concerned is the existing source, it is the organised market place concerned that will have to take reasonable steps to verify the completeness, accuracy and timeliness of the data which they submit through third party RRMs. The market participant would again be relieved from taking reasonable steps to verify the completeness, accuracy and timeliness of the data which organised market places concerned submit as RRMs on their behalf to the Agency to the minimum necessary.

c) Reporting of wholesale energy products through a third-party RRM other than the organised market place concerned selected by the market participant (i.e. another organised market place, trade matching or trade reporting system):

Firstly, it is important to note that such third-party RRM must be able to provide the complete data set to the Agency i.e. to report all data fields, e.g. Contract IDs, as defined by Commission Implementing Regulation (EU) No 1348/2014, and as explained in detail in the Agency’s REMIT Reporting User Package. If this is not the case, the Agency will give a warning to the RRM reporting incomplete data in line with the rules laid down in the RRM Requirements document. Furthermore, if adequate data quality standards and/or compliance with RRM requirements are still not met within the time-frame indicated in the warning, the Agency may, after a certain period of time, which shall not be shorter than six months, discontinue access to the ARIS system for the RRM concerned and inform the market participants affected by the RRM’s non-compliance.

In addition, if the market participant chooses to report its transactions executed at organised market place not through the organised market place concerned, but through a third-party RRM selected by the market participant (i.e. another organised market place, trade matching or trade reporting system), the Agency points out that the market participant will have to ensure the following in order to comply with its obligation to take reasonable steps in order to verify the completeness, accuracy and timeliness of the data which it submits through the third-party RRM to the Agency:

Whilst the organised market place concerned will still be responsible for the completeness and accuracy of the relevant source data, the market participant will be responsible for accuracy, completeness and timeliness of the data concerning (1) the transfer of the data from the organised market place concerned to the third-party RRM selected by the market participant, (2) the handling of the data by the third-party RRM and (3) the transfer of the data from the third-party RRM to the Agency. Both transfers entail a significant risk to undermine the completeness, accuracy and/or timely submission of data to the Agency. Regarding the transfer of the data from the third-party RRM to the Agency, the market participant will not be responsible for failures in the completeness, accuracy or timely submission of the data in cases where these failures are clearly attributable to the respective third party. Nevertheless, the market participants will have to prove to National Regulatory Authorities, on their request, that they have undertaken reasonable steps to verify the completeness, accuracy and timeliness of the data submitted to the Agency.

Last update: 16/02/2016   RSS_Icon Subscribe to this Page’s RSS