REMIT obligations for market participants to the wholesale energy markets
REMIT is the European regulation for fair and transparent trading in energy. It stipulates that energy market participants must register, and share information that is relevant to the market. It also prohibits market abuses such as market manipulation and insider trading.
The REMIT regulation was amended on May 7, 2024. However, the most important rules on the wholesale markets have remained the same.
On this page:
REMIT obligations
Energy market participants must comply with the following obligations according to REMIT (Regulation on wholesale Energy Market Integrity and Transparency):
- Registration as an energy market participant
- Reporting orders and transactions in wholesale energy products to ACER
- Publication of inside information on the energy market
- Notification of algorithmic trading and effective control systems
- Reporting suspicious energy trading
We enforce compliance with REMIT in the Netherlands. We regularly publish news and updates about REMIT rules.
Prohibition of market manipulation
The REMIT obligations help in detecting and combating market manipulation.
Market manipulation leads to market participants getting a false picture of the supply-and-demand situation due to unfair actions of one or more market participants. As a result thereof, they might make poor trading decisions. That is why market manipulation (or an attempt thereof) are strictly prohibited under REMIT.
Example
- An energy producer leverages its considerable market share to artificially lower the supply of electricity and, in that way, manipulate the price.
- A trader places a lot of orders with the goal of confusing other traders and, in that way, making sure they are unable to estimate the actual price properly.
Market manipulation can also occur as a result of errors such as erroneous orders.
Prohibition of insider trading
The REMIT obligations help in tracking down and combating insider trading.
Insider trading occurs when a market participant trades on the basis of information that other market participants do not have, whereas that information should be public. As a result, that business is able to make better decisions than other market participants. Insider trading is therefore strictly prohibited under REMIT.
Example
An energy producer has scheduled maintenance on a plant, but has not published this information. The scheduled maintenance has an effect on the supply of electricity, and thus also on the price. This market participant subsequently trades before the information has been shared with the rest of the market.
Sources
- Regulation (EU) no. 1227/2011
- Implementing Regulation (EU) no. 1348/2014
- Guidance on REMIT application | www.acer.europa.eu