The REMIT Implementing Acts on data reporting obligations entered into force on 7 January 2015.1 This document is the final guidance setting out the rules for reporting wholesale energy products and fundamental data in the EU as required pursuant to Articles 8(2) and 8(6) of the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT). REMIT is an EU regulation enacted to harmonise the European energy markets and protect them from market manipulation and abuse.
The entry into force of the REMIT Implementing Acts also triggers the three month timeframe within which market participants are required to register with their national regulatory authority. Set out below are key take-aways from the final Implementing Acts.
The Article 2 definitions of ‘fundamental data’, ‘standard contracts’, ‘non-standard contracts’, and ‘organised market place’, remain unchanged from those created by DG Energy in the draft implementing acts.2 These are relevant as there are different reporting requirements and staggered implementation dates pertaining to these different types of contracts. However, while the aforementioned definitions stay the same, the definition of ‘group’ has been simplified to rely on Directive 2013/34/EU on annual financial statements. This is consistent with the definition of ‘group’ used in the new Markets in Financial Instruments regime (“MIFID II”) and the European Market Infrastructure Regulation (“EMIR”).
There are certain contracts subject to REMIT regulations that also trigger data reporting requirements under MIFID II and EMIR. To deal with this overlay of obligations, the Commission provides that information which has been reported pursuant to MIFID II or EMIR in a manner compliant with each such piece of legislation shall be deemed to fulfil any co-existing requirement to report under REMIT.3 However, market participants should be aware that the same is not true in reverse; so if a market participant reports pursuant to its REMIT obligations, the obligation to report to the appropriate authority under MIFID II and EMIR rules is not automatically satisfied.
Timing of Reporting:
As set out in Article 7 of the final REMIT implementing acts, standard contracts (i.e. those admitted to trading on an organised market place) must be reported no later than “the working day following the conclusion of the contract or placement of the order” and non-standard contracts (all other contracts) must be reported no later than “one month following the conclusion, modification, or termination of the contract”. These requirements are the same as originally prepared by the Commission in the draft Implementing Acts. However, the final implementing acts add two further clarifications as to the timing of reporting: (1) non-public auction markets need only report concluded contracts and final orders no later than the working day following the auction; and (2) orders placed in broker’s voice operated services and not appearing on electronic screens are only reportable on the request of ACER.
Responsibility for Reporting Data:
Article 11(2) of the final implementing acts specifically states that “[w]here a person…reports those data through a third party the person shall not be responsible for failures in the completeness, accuracy or timely submission for the data which are attributable to the third party.”4 While the parties must take “reasonable steps” to ensure that said third parties are reporting the data accurately, this is in direct contrast to the EMIR regime where, when the opposing counterparty or third party is reporting on behalf on a market participant, the market participant is responsible for any information which is reported or filed on its behalf.
The REMIT Portal:
The REMIT Portal, which compiles into one place all information and applications that market participants need as part of the REMIT data reporting requirements, went live on 8 January 2015. Amongst other things, the REMIT Portal allows market participants to formally self-register as Registered Reporting Mechanisms (“RRMs”), and provides certain key documents as required by the REMIT regulation, including the Transaction Reporting User Manual, the Manual of Procedures on transaction and fundamental data reporting, the Requirements for RRMs and a List of Organised Market Places.
Entry into force:
While the final implementing acts came into force on 7 January 2015, there is a 9 month deferred implementation period before the reporting obligation becomes effective for standard contracts (i.e. those traded on an organised market place), meaning such contracts are reportable from 7 October 2015. In comparison, there is a 15 month deferred implementation for non-standard contracts, which will be reportable from 7 April 2016. In addition to the data reporting obligations, other key dates already mentioned include: (1) 8 January 2015, when the REMIT Portal went live; and (2) 6 April 2015, being the date by which market participants must ensure that they are registered with their NRA.
Market participants who enter into wholesale energy contracts must take the appropriate steps to ensure they are REMIT compliant and prepare for the timelines as the requirements come into force.