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REMIT Phase II is just around the corner 23 Mar 2016

REMIT is the Regulation (EU) 1227/2011 on wholesale energy market integrity and transparency which introduces a sector specific (power and gas) monitoring framework to detect and prevent market abuse and insider dealing. The Agency for the Cooperation of Energy Regulators (ACER), in cooperation with the National Regulatory Authorities (NRAs), has been charged with the task of monitoring the Markets.

To date, REMIT has seen the registration of more than 7,000 Market Participants (MPs), the recognition of 68 Organised Market Places (OMPs), the approval of 65 Registered Reporting Mechanisms (RRMs), the reporting of more than 1 million data records and the publication of more than 600 pages of guidance. All this with the second phase yet to come into effect in just few weeks, on the 7th of April. 

REMIT reporting can be broken down into three data requirements: Transaction Data, Fundamental Data and Inside Information. The party responsible for ensuring reporting is fulfilled correctly and in a timely manner (deadline is the following working day for most of the contracts) depends on the type of data. The first phase of REMIT transaction reporting put the onus on the OMPs since it required the reporting of transactions concluded on such. The second phase of REMIT focuses on transactions concluded outside an OMP and Market Participants and TSOs are the protagonists this time.

For power Transportation Contracts, primary explicit capacity allocation contracts and resales will be reported by the TSO. Transfers of contracts won’t be reported by the TSO and Market Participants will be required to find a way to ensure this data reaches the Agency. Some interconnectors’ operators haven’t required any action from the Market Participants, while others have requested a Data Reporting Agreement to be signed. 

EFETnet was the clear winner in Phase 1 since it managed to get all the brokers aligned to forward their trade data to them and offered the service to Market Participants for free; and it looks like for Phase 2 EFETnet has taken the lead again. Last week, EFETnet made two significant announcements. Firstly, it announced the launch of ‘eRR External Agent’ functionality, which will allow Market Participants to report on behalf of a third party free of charge. That is something unexpected but more than welcome since it will bring greater flexibility to the market in order to fulfil REMIT reporting obligations. It is a reality that the Agency has struggled to cope with the volume of applications submitted to become a RRM (out of 900 applications submitted, less than 70 have been approved). The Agency recently announced its plans to prioritise Third Party RRMs, TSOs, SSOs and LSOs, but not individual self-reporting Market Participants (MPs). This ‘eRR External Agent’ functionality will be of special benefit to small players for which executing the reporting obligation themselves would impose an uneconomical burden; potentially when executing bilateral trades outside an OMP, one counterparty could delegate the reporting on the other. Secondly, EFETnet achieved full ACER certification for the reporting of transactions under REMIT Phase 2, which will allow them to cover all aspect of reporting by trading organisations and storage operators. Not many RRMs have achieved this. 

REMIT phase 2 is looming now but there are still some unknowns, especially around Tables 3 (secondary market resale and transfer of long term transmission rights in electricity) and 4 (secondary capacity allocations for gas). We recommend Market Participants to monitor the REMIT website closely. For further information please refer to the 11th Public Workshop on REMIT Implementation (http://www.acer.europa.eu/Events/11th-Public-Workshop-on-REMIT-implementation/Documents/Presentations.pdf

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