REMIT prohibits the abuse of inside information and the manipulation of the wholesale energy market. According to REMIT, market participants are obligated to publish any inside information on wholesale energy products that will likely have a significant impact on the wholesale energy market that they have in their possession. REMIT also requires that parties trading on the wholesale market register as market participants in the REMIT register maintained by the national regulator and report their transactions to the Agency for the Cooperation of Energy Regulators (ACER).
The Energy Authority is the national regulator of the wholesale energy market in Finland. Executive powers of the Energy Authority include monitoring of compliance with Regulation (EU) No 1227/2011 of the European Parliament and the Council, hereinafter “REMIT”.
Wholesale energy products
Wholesale energy products included in the scope of the REMIT regulation are:
- Electricity or natural gas delivery contracts, provided that the delivery takes place within the EU
- Derivatives connected to electricity or natural gas that has been produced, traded or delivered within the EU
- Electricity or natural gas transmission contracts within the EU
- Derivatives connected to electricity or natural gas transmission within the EU
- Contracts on delivery or distribution of electricity or natural gas to end customers, but only if the end customer’s consumption capacity exceeds 600 GWh/year
A market participants is a party to whom the regulation and obligations of REMIT mainly apply. In REMIT, a market participant refers to a person, transmission system operators included, who enters into transactions. Transactions also include the placing of orders to trade, in one or more wholesale energy markets.
In other words, all parties trading or submitting offers on wholesales energy products are included in the scope of application of REMIT. In this connection, “person” refers to both legal and natural persons.
Market participants include at least the following:
- Natural or legal persons who enter into transactions in the wholesale markets, such as sellers and buyers of energy, producers of electricity or natural gas, natural gas shippers and consignors, storage system operators (SSO), LNG system operators (LSO) and investment service firms
- Parties trading in energy derivatives
- Transmission system operators (TSO)
- Electricity or natural gas end users with a technical consumption capacity at a single location of at least 600 GWh/year
Determines compliance with and content of the reporting obligation in more detail, for example
ACER maintains in its REMIT portal information on issues pertaining to REMIT. The portal includes information on the following, for example:
- REMIT legislation
- Technical reporting requirements for transactions
- Remit guidance notes
- List of standard contracts
- List of registered reporting mechanisms
- European register of market participants
ACER prepares guidance on issues pertaining to the application of REMIT. The guidance is not legally binding. The guidance is primarily meant for national regulators, but it can also benefit market participants in cases where REMIT needs to be interpreted.
Guidance on the Transparency Regulation and related guidance
Market participants trading on the wholesale energy markets must register with one national regulator. Inclusion in the REMIT register is a prerequisite for trading on the wholesale energy market. Whether a market participant has been appropriately registered or not does not influence the existence of the REMIT obligations of the other market participants, however.
The national regulator is determined on the basis of the market participant’s location or residence, or if the market participant is not located or does not reside in the EU, based on the member state in which the market participant operates. Hence, a market participant operating in Finland must, as a general rule, register with the Energy Authority, unless it is already registered with a regulatory authority in another EU member state.
The registration takes place in the Centralised European Register of Energy Market Participants (CEREMP).
Registration to CEREMP
Market participants trading on the wholesale energy markets must register with one national regulator.
The registration takes place in the Centralised European Register of Energy Market Participants (CEREMP).
Enquiries about the register and the CEREMP system used in the registration: [email protected]
To whom does the reporting obligation apply?
At the EU level, the Agency for the Cooperation of Energy Regulators (ACER) is responsible for the monitoring of the functionality of the wholesale energy market. Market participants are obligated to report their wholesale market transactions to ACER in the manner specified in Article 8 of REMIT.
ACER maintains the ACER REMIT Information System (ARIS). The market participants bear the responsibility for the submission of the information to ACER. A market participant must report its information through the system or outsource the reporting by signing a contract with a third party. Typical solutions include purchasing the reporting service from a third party or centralising reporting on behalf of contracting parties to one contracting party. Centralised market places, such as stock exchanges, offer reporting services.
If a third party handles the reporting on behalf of the market participant based on a contract or if one contracting party handles the reporting on behalf of all contracting parties, the report must include the following:
Essential information on all the parties
All the information the parties would have submitted had they separately submitted their reports
As the party obligated to report, the market participant always bears the ultimate responsibility for compliance with the reporting obligation. This is the case also if the reporting has been outsourced to a third party based on a contract.
What does the reporting obligation entail?
The reporting obligation applies to trading on energy commodities and related financial derivatives. “Energy commodities” refers to electricity and natural gas, including liquefied natural gas or LNG. The reporting obligation applies to both completed transactions and offers. Transactions to be reported include transactions involving the delivery, production or transmission of electricity or natural gas in an EU or EEA state. The reporting obligation on transmission only applies to transmission contracts between two or more market places or bidding zones (for example, at present Finland is a single bidding zone and transmission contracts within a single bidding zone are not to be reported).
The reporting obligation for transactions in the wholesale markets has been specified with Commission Implementing Regulation (EU) No 1348/2014, hereinafter “Implementing Regulation”. The Implementing Regulation specifies in more detail to which contracts and orders the market participants’ obligation to supply information, as well as when and in which format the information must be submitted to the agency. ACER also updates a list of transactions to be reported.
The Implementing Regulation further specifies the following details regarding reporting, for example:
- List of reported contracts
- Schedule for reports on transactions
- Reporting channels and procedures
- Technical and organisational requirements, as well as liability on reporting
- More specific regulations on data to be reported
Further questions regarding reporting and the reporting system: [email protected]
Obligation to disclose inside information
“Market participants shall publicly disclose in an effective and timely manner inside information which they possess” (Article 4 of REMIT).
The disclosure obligation applies to all market participants who possess:
- Any specific or unpublished information relevant to the capacity and use of facilities for production, storage, consumption or transmission of electricity or natural gas which
- Is directly or indirectly connected to one or several wholesale energy products; and
- Would, if published, probably have a significant impact on the prices of these products.
The disclosure obligation applies but is not limited to the following:
- Any information relevant to the capacity and use of facilities for production, storage, consumption or transmission of electricity or natural gas
- Any information related to the capacity and use of LNG facilities, including planned or unplanned unavailability of these facilities
Not disclosing inside information is possible only in exceptional cases. A market participant may, exceptionally and at its own risk, postpone the publication of inside information to protect its legitimate interests if
- This is not likely to mislead the general public; and
- The market participant is able to guarantee that the information remains confidential; and
- The market participant does not use the information to make any decisions regarding the trade of wholesale energy products.
All of the above-mentioned prerequisites must be met. In such a case, the market participant must submit the information and justification on why the disclosure will be postponed without delay to the agency (ACER) and the appropriate national regulator (the Energy Authority). This will not exempt the market participant from any investigation regarding a failure to report inside information or any consequences in case of suspected abuse.
How must inside information be disclosed?
Article 10 of the Implementing Regulation specifies the procedures to be used when disclosing inside information. Market participants may agree on the disclosure of inside information on a platform specified as suitable for the disclosure of inside information. ACER maintains a list of publication platforms suitable for the disclosure of inside information (IIP) in its REMIT Portal. There are separate reporting channels for the disclosure of inside information. The market participant can select which channel it wants to use. Inside information may be disclosed on a website of the market participants, but it must be done in compliance with the Implementing Regulation, by using web feeds.
The market participant bears the responsibility for appropriate disclosure of inside information, including publication through an acceptable channel.
Commission Regulation on submission and publication of data in electricity markets (Transparency Regulation)
There are more specific regulations on reporting unavailability information, content of the reports and schedules in the Transparency Regulation or Commission Regulation No 543/2013. The Transparency Regulation only applies to wholesale electricity markets.
The Transparency Regulation established a website maintained by the European Network of Transmission System Operators for Electricity (ENTSO-E) on which key information on the electricity markets is published. This information is absolutely necessary for market participants when they are making efficient production, consumption and trading decisions.
Transmission system operators, electricity producers and large-scale electricity users are obligated to report the information specified in the Transparency Regulation to the transmission system operator. They must ensure that the reported information is complete and of the required quality. The transmission system operator must further submit the information to the ENTSO-E website.
The Transparency Regulation requires generation units of at least 100 MW to report information on their hourly production. The reporting must be carried out with a delay of five days. The Transparency Regulation also requires reporting of country-specific production data divided by production type with a delay of one hour.
European grid operators are also obligated to report longer-term consumption forecasts, as well as detailed information on the management of bottlenecks, reserves and the regulating power market.
ENTSO-E has prepared a manual including all the reporting details and reporting formats. Fingrid has also prepared an application guide for electricity market operators in Finland on the reporting of electricity market information.
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