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Ofgem REMIT investigation into National Grid

Ofgem, the National Regulatory Authority for Great Britain, has announced the closure of an investigation held into a possible breach of REMIT Article 5 (prohibition of market manipulation) against National Grid. The announcement can be found here.

The investigation focused on incorrect De-Rated Margin (DRM) calculations being published on the Elexon web site, leading to “false or misleading price signals”, which are prohibited under REMIT Article 5 and defined by REMIT Article 2(2)b. Ofgem has chosen not to proceed with the investigation, giving the reason that the breach had a limited impact on the market. It does note that the issue has occurred several times.

A few weeks ago, ACER published a guidance paper on “Wash Trades” (see here). This outlined ACER’s thoughts on what is considered an illegal wash trade, relying on the fact that such patterns give “false or misleading price signals”. The definition of such signals would appear to be of fundamental importance in determining the legality of certain market activities.


About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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