ACER issued the latest version of the “REMIT Quarterly” newsletter on Friday, which can be found here. It contains a wide range of content spanning multiple REMIT related topics. In addition to the regular statistics found in previous newsletters(see here), there are several points of interest relating to:
- Reporting
- Algorithmic trading
- Inside Information disclosure
Reporting
The newsletter reveals many statistics about the quantity of data reported of each type, with 1.9 billions records reported so far, with a constant increase in the number of reports over time also reported. This is attributed to several factors including an increase in algorithmic trading. Figure 1 on page 2 summarises the situations in a comprehensive graph.
Figure 4 on page 4 reveals that the timeliness of reporting has declined in 2018 compared to 2017, especially for bilateral trades and non standard contracts. There is also mention that new reporting schemas will come into use either in Q4 2019, or in 2020, as announced previously (see here).
Algorithmic trading
Page 5 of the newsletter sees a discussion on the issue of algorithmic trading in the energy markets, which are not covered by MiFID II. The newsletter gives some basic examples of problematic behaviours, including manipulative behaviour caused by algorithms, as well as the practice of manipulating the algorithmic themselves. Reference is made to some of the relevant rules found under MiFID II (“RTS 6”) which apply to any market participant carrying out algorithmic trading in Financial Instruments, whether MiFID regulated or not. There is the suggestion of the provision of a “sandbox”, in a similar fashion to that offered by the UK’s Financial Conduct Authority.
Disclosure of inside information
There is a substantial section in the newsletter on the disclosure of inside information. This includes the suggestion that such disclosures made on web sites rather than Inside Information Platforms may not be “effective disclosure” (this topic was last discussed in 2018, here). There is also mention of the “possible introduction of indicative pan-European thresholds for the disclosure of inside information“. This topic, relating to the definition of “precise” and “significant price effect”, has been one where greater clarity has been sought.
These three topics are likely to consume much bandwidth over the coming year.
Discussion
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