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Dawn raid in physical withholding case in Romania and a case in the US

The Romanian Competition Council, in cooperation with the ANRE (the National Regulatory Authority of Romania) has carried out dawn raids as part of an investigation into a possible abuse of a dominant position of Hidroelectrica SA. The announcement can be found here.

Hidroelectrica are alleged to have ” limited the quantity of traded energy on some segments of the market (especially on the market for Next Day), in order to achieve some offers with bigger prices on the Equilibrium Market (EM)”. In some cases, such behaviour can constitute a breach of REMIT Article 5, for the practice of “generation withholding”. Previous cases of withholding include one in 2016 in Italy (see here), and a large fine in Spain at the end of 2015 (see here). This news follows cases in alleged “capacity hoarding” in Denmark earlier this year as well as several others (see here).

In the US, a firm has been fined $100k for having multiple wash trades over a period of 10 months in 2016. The fines are fully described here on the DCM blog, with the notice from the CME here.  The blog post talks about the danger of considering such fines to be “parking tickets”. This fine of a bank in the Netherlands last week, for anti money laundering failures, included a significant amount for disgorgement, that covers possible savings from non compliance.

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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