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MAR, REMIT

REMIT fine in Denmark and failed case in the US

On Friday the Danish Utility Regulator announced that Danmark Energi has been fined 750,000 Danish Krone as well as a charge of 354,000 Danish Krone for disgorgement, for a breach of REMIT Article 5, the prohibition against market manipulation. The fine is levied for several instances of “Capacity hoarding”, that is the claiming of capacity on borders without utilisation, thus distorting market prices via decoupling or otherwise. The press release and description of the occasions of the activity can be found here on the Danish Utility Regulator web site.

The case was first brought to the public’s attention in March (see here). On the same day ACER released a guidance note on capacity hoarding which can be found here. The note has generated a great deal of discussion in the market in various forums. This fine follows several others in recent months including two fines last week in Spain relating to the gas market (see here).

CFTC loses manipulation case against DRW
A federal judge in Manhattan has dismissed a case brought by the CFTC against DRW Investments LLC and their trader Don Wilson. A news story relating to the case can be found here on the Reuters web site. DRW were accused of executing trades in order to influence the price so that other positions would benefit from the price move, in effect “marking the close”. The ruling came to its conclusion for several reasons, including the fact  that although it may have been known that the price would move when executing trades, all of the trades were entered into with legitimate purposes.  Circuit Judge Richard Sullivan stated that “It is not illegal to be smarter than your counterparties in a swap transaction” as part of the ruling. A description of the case by Ropes and Gray LLP can be found here on the JD Supra web site.  The complaint from the CFTC can be found here.

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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