On 8 July 2014, the European Commission’s DG Energy published an updated draft of the implementing acts on data reporting under the Regulation on Wholesale Energy Market Integrity and Transparency (“REMIT”).1 This document sets out the requirements for the reporting of wholesale energy products and fundamental data in the EU as part of the REMIT implementing acts. This draft will come into effect when it is published in its final version in the EU’s Official Journal, which is expected to occur in Autumn 2014.
The draft implementing act on data reporting sets out the types of wholesale energy transactions to be reported to the Agency for the Cooperation of Energy Regulators (“ACER”), and the eighteen-page annex explains specific details of contracts to be reported. The draft text specifies that market participants can report through an organised marketplace or through trade matching or trade reporting systems. This draft also sets out rules for the reporting of fundamental data for electricity and gas.
Definitions: The draft implementing act defines fundamental data as “information related to the capacity and use of facilities for production, storage, consumption or transmission of electricity and natural gas or related to the capacity and use of LNG facilities, including planned or unplanned unavailability of these facilities”2, for which reporting details are set out in Articles 8 (electricity) and 9 (gas). The Commission defines a “standard contract” as a contract concerning a wholesale energy product admitted to trading at an organised market place; all other contracts are considered “non-standard contracts”. There are different requirements for reporting details and timing for these two contract classifications.
Reportable only upon reasoned request: Article 4 specifies that certain contracts, including intragroup contracts, need be reportable only “upon reasoned request of the Agency”3, unless concluded on organised market places. However, the draft does not provide a timeframe for when a “reasonable request” may take place, nor any clarification of the details related to these types of contracts which ACER may request. Unless the final published implementing act gives further guidance with respect to Article 4, market participants must consider keeping similar records for these types of contracts, or consider consulting ACER for the information which may be requested. Article 11(2) clarifies that market participants only participating in the transactions as outlined in Article 4 need not register with their national regulatory authority.
No double reporting: Recital 6 of the draft implementing act states explicitly that the Commission aims to avoid double reporting. Therefore, if a contract already is required to be reported by EMIR, MIFIR, or their implementing acts, these contracts need not be reported to ACER pursuant to REMIT.4 Instead, ACER will be provided the relevant reporting information by ESMA, trade repositories, competent authorities, or the approved reporting mechanisms referred to in Article 2 of MIFIR.
Historical reporting: The draft implementing act does not have an historical reporting requirement. The rules will come into effect only for contracts concluded after the implementing act, enters into force and those concluded “before the date on which the reporting obligation becomes applicable and remain outstanding on that date.”5 All other prior transactions need not be reported.
Timing: The timing of the reporting of transactions depends on the type of contract, as set out in Article 7. The details and any modification or termination of standard contracts “shall be reported as soon as possible but no later than on the working day following the conclusion of the contract”,6 and the details for non-standard contracts “shall be reported no later than one month following the conclusion, modification or termination of the contract.”7 Article 7(4) further clarifies that “[c]ontracts which were concluded before the date on which the reporting obligation becomes applicable and remain outstanding on that date shall be reported…within 90 days”.8
Inside information: Article 10 requires that firms disclosing inside information under REMIT via a website shall send ACER their “web feeds” and shall use the ACER registration code or the unique market participant code provided while registering in accordance with Article 9 REMIT.9
Staggered implementation: The reporting obligation for market participants will commence six months after the implementing regulation enters into force, with two exceptions. First, the obligation to report fundamental data on electricity shall not commence until after the creation of the central information transparency platform pursuant to Article 3(3) of Regulation (EU) No 543/2013. Also, the reporting obligations for persons required to report data for non-standard transactions is deferred for twelve months after the implementing regulation enters into force.10
Further Action by ACER
ACER will play a large role in the day-to-day application of the implementing acts. The draft implementing regulation requires ACER to:
- “draw up and maintain a public list of standard contracts and organised market places and update that list on a regular basis.”11
- “explain the details of the reportable information referred in [Article 5(1)] in a user manual and after consulting reporting parties make it available to the public.”12
- “after consulting reporting parties establish procedures, standards and electronic formats based on established industry standards for reporting of information referred to in Articles 6, 8 and 9.”13
- “after consulting reporting parties develop technical and organisational requirements for submitting data” and “assess whether reporting parties comply with the requirements”14.
- Register “[r]eporting parties who comply with the requirements”15.
The publication of the draft implementing acts emphasise the need for market participants to start taking steps to ensure that they are able to remain REMIT compliant as the forthcoming reporting and registration requirements are phased in. This will require, at a minimum, taking an inventory of current energy contracts and ensuring continued monitoring and analysis of the new rules as they are finalised and the corresponding timeline becomes clear.