Ofgem, the National Regulatory Authority for the GB market, have issued this open letter on the prohibition of market abuse under REMIT.
The letter stresses that all market participants are responsible for complying with Article 5 of REMIT, the prohibition against market abuse, and the rules will be considered to be broken whether or not there was intent (although criminal sanctions only apply to intentional attempted or actual manipulation).The letter gives several scenarios that could constitute a breach, including some interesting ones that could constitute “pre arranged trading”. It also refers to the Accepted Market Practices(AMP) regime, and reminds us that no AMP is actually yet registered for the energy markets.
The letter then reminds us of the previous one issued with regards to the publication of inside information, and Ofgem’s view of both the fields required and also the requirement to publish as soon as possible. The results of the consultation run by ACER are due to be published by the end of September.
The letter continues by referring to the transparency regulation(“ETR”) that came into force in January and reminds market participants that they must comply with this as well. The letter concludes with a reminder that registration must be completed before reporting starts on the 7th October (or April if any trading off venue).
This letter comes only a few days after the FCA published their review of the commodities market. This highlighted some deficiencies in monitoring and process amongst certain market participants.
The message from both documents is that the market can expect a great level of scrutiny going forward, both from energy and financial regulators.