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.