The Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) aims to prevent and protect consumers and businesses against market abuse in the European electricity and gas markets. The rules were revised in May 2024 to ensure they keep pace with evolving market dynamics. The following is an overview of the latest developments.

ACER addresses algorithmic trading notifications

In April 2024, ACER addressed several questions from stakeholders to help them comply with their reporting obligations under the revised REMIT, before it entered into force.

As a follow up, ACER has now clarified in an open letter the obligations for market participants to notify National Regulatory Authorities (NRAs) and ACER on their usage of algorithmic trading and direct electronic access.

Why is the open letter relevant?

The open letter provides examples on which activities fall under the new notification obligations for algorithmic trading and therefore helps market participants comply with the revised REMIT (Article 5a).

These notifications will reinforce regulatory oversight, ensure market transparency, and help manage risks associated with these advanced trading methods.

Energy Trading Annual Industry Report 2024

The 2024 report provides a snapshot of the industry’s current climate. The insight was collated from over 9,000 participants who attended Energy Trading in-person events.

Highlights from the Energy Trading Regulation and Compliance track:

• The biggest challenges for compliance last year for more than half of those polled were REMIT II and the EMIR REFIT.
• The biggest regulatory risk was polled as overregulation with again REMIT II and the EMIR REFIT cited as the major areas of concern.
• A whopping 88% of those polled said scrutiny and enforcement will get tougher in the coming year.
• Data management and reconciliation were polled as the biggest challenges for reporting.

ACER’s latest REMIT Quarterly

The REMIT Quarterly newsletter has been published and provides updates on market surveillance and enforcement. The publication is ACER’s main channel of communication with stakeholders on REMIT-related matters, providing updates on ACER’s REMIT activities.

The 37th edition covers the second quarter of 2024 and covers:

• The ACER and European Commission joint workshop on REMIT II implementation, held on June 11, 2024.
• Further details on ACER’s public consultation on new data reporting requirements of the REMIT Implementing Regulation’s Annex, running until September 6, 2024.
• The announcement of a joint roundtable meeting on proposals for REMIT II delegated acts for Registered Reporting Mechanisms (RRMs) and Inside Information Platforms (IIPs), scheduled for September 17 and 18, 2024.
• Updated overview of the sanction decisions under REMIT for 2024, with 345 cases under review at the end of the second quarter.
• Statistics for RRMs’ contingency reports.
• Overview of trading on organized market places in the second quarter of 2024.
• ACER’s market surveillance and conduct activities under REMIT.
• Overview of REMIT cases.
• Recommendations to the Commission.

REMIT fine in Germany

The Bundesnetzagentur has imposed a fine of €75,000 ($82,000) on the gas transmission system operator GASCADE Gastransport GmbH for breaching its obligation to publish inside information.

GASCADE published erroneous Nord Stream 2 figures

During commissioning tests in August 2021 the company encountered IT problems that led to the publication of incorrect values for the gas flows for the Lubmin 2 network point. At that time the Lubmin 2 network point could only be accessed through the Nord Stream 2 pipeline, so the publication of figures unequal to zero suggested its imminent commissioning.

This happened at a time when the Nord Stream 2 pipeline was near completion although commissioning was not foreseeable due to the fact that it was not yet certified in technical or regulatory terms.

The market was keeping a close watch on the completion process and the related discussions concerning certification with a great deal of suspense, which led to increased speculation about the final commissioning date of the Nord Stream 2 pipeline. The publication of the erroneous figures in August 2021 and the impression it left that the pipeline had been placed into operation led to a short-term but nevertheless massive drop in prices by up to €4.00 ($4.40)/MWh.

Company saw no need to make a clarifying statement to the market

The impact of the erroneous publications did not go unnoticed by GASCADE.

The corrected figures were published shortly after 6pm on August 18, 2021, but no clarification message was published beforehand in the form of an Urgent Market Message (UMM) on one of the dedicated Inside Information Platforms (IIPs). The company indicated that it did not consider a UMM necessary since it was not presumed that the market would consider the values to be genuine. However, the drop in prices and various inquiries by the press shortly after the erroneous figures were published demonstrate in the eyes of the Bundesnetzagentur the relevance of the information for prices.

The amount of the fine is not yet final and absolute. The Higher Regional Court of Düsseldorf will decide on any appeals.

Inside information publication requirement

REMIT (Regulation (EU) 1227/2011) requires market participants to publish inside information effectively and without undue delay. Inside information is precise information that is not publicly known and relates to one or more wholesale energy products that, when disclosed, may potentially have a (significant) impact on market prices.

However, such information must be published on a dedicated platform no later than one hour after the relevant event has occurred and thus be made available to the entire market. The Bundesnetzagentur has published an information sheet on the effective and timely publication of inside information so that market participants are aware of their requirements. The information sheet is available (in German) through the following link.