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Brexit, REMIT

Brexit update: REMIT SI announced, and developments on the financial side

There have been a few developments in the Brexit story since our last post here. On the political level, the story continues to dominate the headlines in the UK, with a commitment to continue to negotiate as much as possible (see here on The Guardian web site).

The UK’s HM Government Department for Business, Energy and Industrial Strategy (BEIS) has published this letter, announcing the intention to reveal several draft Statutory Instruments (SIs) relating to energy. One of the proposed SIs relates to REMIT, including a transfer of anti abuse legislation and the ability to make technical changes to the reporting regime. This article on Utility Week looks at the announcement further.

The proposed SIs also cover network codes. These are of particular importance to the functioning of the SEM/ISEM market in Ireland. There has been a commitment in previous documents to ensure that the Single Electricity Market(SEM) covering the Republic of Ireland and Northern Ireland be maintained. This article by Meabh Cormacain on the London School of Economics web site looks at the possible obstacles to keeping the SEM/ISEM after Brexit, in particular the Network Codes and also from a political perspective.

On the financial side, HM Government has published this  presentation summarising the proposal contained in the government’s white paper on Brexit (see here). This post by  Simon Lovegrove of Norton Rose Fulbright summarises the presentation and relevant parts of the paper. In terms of possible enhanced Equivalence, this article on the Reuters web site looks at the likelihood of any such mechanism being put in place, covering a wide variety of views.

This article on The Trade site reports that 87% of UK buy side firms are not currently planning any relocation due to Brexit, although this could change once more is known. This article on the Bloomberg web site looks at 6 key issues relating to the financial sector with respect to Brexit: Equivalence, cross border trading, clearing houses, delegation, contract validity and data. Each will need to be addressed somehow as part of the withdrawal. Never the less, HM Treasury is making contingency plans for a “no deal” Brexit, as reported here on the Citywire web site.

Despite the lack of finality from the political discussions, the deadline approaches. It is therefore important for any UK firms, or those with any UK dealings, including positions on UK venues, to have plans in place, and so action them, under both “hard” and “soft” Brexit scenarios.

 

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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