REMIT Compliance
Each company active in the electricity or gas wholesale market has to comply to the insider trading and market abuse rules of REMIT. With the updated version of REMIT in 2024 and the regular publication of clarifications and compliance best practices by ACER, you have to constantly make sure that your compliance framework for monitoring and preventing market manipulation and the public disclosure of inside information is still up-to date.
This is certainly also true for TSOs, who are subject to the PPAET obligations under article 15 of REMIT. As such the TSO has an obligation to notify the relevant NRA without delay if they reasonably suspect that a wholesale energy market transaction might breach the prohibitions on insider trading or market manipulation under Art. 3 and 5 of REMIT.
We have helped TSOs to implement effective arrangements and procedures to identify breaches. (See the Case Study).
It is hard to be an expert on all the relevant regulations and compliance issues, so there are times when you need our expert support, guidance or second opinion. For instance through delivering the annual mandatory training of your people, or offering a fresh pair of eyes to make an assessment of your existing compliance framework Thus avoiding being fined, which could be quite hefty.
The Client: A European Electricity Transmission System Operator
Users: The Markets Surveillance Team
The Problem:
A TSO as organizer of the balancing markets is professionally arranging transactions and subject to the PPAET obligations under article 15 of REMIT. As such the TSO has an obligation to notify the relevant NRA without delay if they reasonably suspect that a wholesale energy market transaction might breach the prohibitions on insider trading or market manipulation under Art. 3 and 5 of REMIT.
To fulfil their PPAET obligation to notify NRAs, the TSO must establish and maintain effective arrangements and procedures to identify breaches. Such arrangements may involve setting up active software aided surveillance systems, passive process based mechanisms to detect and notify potential market abuses, as well as organizational mechanisms to avoid possible conflicts which may arise between commercial and compliance interests.
As the TSO lacked the necessary internal expertise, they organized a tender for expert support that Maycroft did win.
The solution:
Kasper Walet as the expert designed the effective arrangements. This was a 2 way approach. One was that Kasper together with the Front Office people of the TSO conducted a Risk Assessment. The results are written down in a formal document.
Second Kasper designed a Market Monitoring Strategy Document, as required by REMIT regulation and ACER Guidance.
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