After a break we are restarting this blog today. Here are some key stories from the past weeks.
REMIT Implementing Act consultation
ACER opened a consultation on the changes to the REMIT Implementing Act that will be part of the changes arising from REMIT II(see here). The consultation covers the fields to be reported and looks at the existing fields as well as several new proposals, including, for example a proposal to split the use of Tables 1 and 2. The consultation closes on 6th September 2024 and can be found here.
Subscribers to the ETR Regulatory Support Service(see here) will receive a full analysis of the consultation proposals.
REMIT fine in Germany
Bundesnetzagentur has fined a market participant 75k EUR for improper disclosures of Inside Information under REMIT Article 4 in August 2021. They published incorrect information about flows around the Lubmin 2 network point due to IT errors. This led to speculation about whether the commissioning of Nordstream, 2 was nearer to starting. They did not correct the error or publish a clarifying UMM which made matters worse and led to a drop in prices of 4EUR/MWh. The notice in English can be found here.
REMIT Schema
ACER has released updated schemas for tables 1 and 2, bringing them into line with the TRUM v6.0(see here) . These add specific contract types for PPAs and LNG contracts. The schemas can be found here and here.
ACM notes on algorithmic trading
The ACM has carried out a study and written a paper on the use of algorithmic trading in the energy markets. It was carried out in conjunction with the AFM (Netherlands NCA). Overall it appears to have a positive view on the use of algos in terms of controls, compliance and the impact on the market. It does remind the market of the risks of algos, and also of the requirements of REMIT II. The summary can be found here and the actual study here.
MIFID II C4 Q+A
ESMA has given a new answer on MIFID II, confirming that forward emissions allowances which are not part of the ETS scheme are C4 Financial Instruments and Derivatives.The Q+A is reproduced here:
Do the financial instruments in Annex I, section C(4) include derivatives on emission allowances not recognized under the EU ETS, thus making these reportable under EMIR? Specific example: Derivatives on UKAs, recognized under UK ETS.
Answer: Yes. The definition of derivatives on emission allowances provided in Section C(4) of Annex I to MiFID II does not distinguish between emission allowances recognised for compliance under the EU ETS Directive, and other emission allowances. Therefore, derivatives on emission allowances not recognised for compliance under that Directive qualify as financial instruments.
The original Q+A can be found here.
ESMA STOR summary
ESMA has produced their latest summary on the number of Suspicious Transaction or Order Reports submitted under MAR in the latest period. The report can be found here.
UK REFIT
The FCA has published the latest Q+A in preparation for the UK EMIR that starts on 30 September 2024 following a consultation (see here). They can be found here (after 2 updates).
ISDA has responded to the consultation here.
TCLC Guidance update
Ofgem has updated the Guidance relating to the Transmission Constraint Licence Condition. It adds some extra guidance on how to determine whether a constraint exists and also the interaction with REMIT. It can be found here.