The revision of REMIT: making it future-proof

While the Commission’s proposal is going through the legislative process, the Debate will provide an opportunity to discuss the role of ACER in the future REMIT framework, in particular with respect to investigations and enforcement.

Outline

The 2011 EU Regulation on wholesale energy market integrity and transparency (REMIT) aims at detecting and deterring market abuse in the energy sector, in the forms of market manipulation and insider trading, thus promoting integrity and transparency of trading in wholesale energy products.

The monitoring framework introduced by REMIT was unprecedented worldwide in terms of its geographical and product scope, and its implementation has posed a formidable challenge for the European Union Agency for the Cooperation of Energy Regulators (ACER), National Regulatory Authorities for energy (NRAs), energy market participants – which have to report trade data – and other stakeholders – responsible for reporting fundamental data. The central role given to ACER in the implementation of REMIT contributed to cost-savings at the Member State level as concerns data collection, monitoring and surveillance of suspicious transactions.

Over the years, some limitations of the provisions of REMIT has emerged, in particular with respect to their application to new ways of trading – for example, algorithmic trading – as well as to the effectivenss of the investigation and enforcement process. Moreover, the sharp increase in energy prices since the summer of 2021, exacerbated by the unlawful aggression of Ukraine by the Russian Federation, has renewed concernes about the integrity of energy trading.

As a result, on 14 March 2023, the Commission proposed some amendments to REMIT. Broadly speaking, the Commission’s proposal aims at improving REMIT in four areas:

• a closer alignment of the REMIT legal framework with the EU financial market legal framework;
• the adaptation of the scope of REMIT to current and evolving market circumstance;
• improvements to REMIT data quality, reporting, transparency and monitoring;
• a stronger energy consumer protection against market abuse, by strengthening the enforcement regime of cases with EU dimension.

With respect to the last dimension, the Commission’s proposal, inter alia, strengthens the ACER’s investigatory powers for a specific set of cases of potential market abuse that involve a complex cross-border dimension in Europe or instances where they involve a non EU based supplier. However, the Commission’s proposal could have been more ambitious and seems not fully to take into account the need to ensure an effective surveillance of energy trading and enforcement of the prohibitions and obligations in REMIT in a market which is increasingly cross-border, if not pan-European.

The Commission’s proposal also aims at harmonising the powers of NRAs to adopt administrative sanctions and other administrative measures in relation to the breaches of REMIT, including by setting minimum threshoods for the maximum levels of fines established at national level for breaches of the different types of REMIT provisions. Again, the Commission’s proposal falls short of detting a EU framework for enforcement and sanctioning.

Programme

Introduction to the Debate and Opening Presentations
14.00 – 14.05    Introduction to the Debate
Alberto Pototschnig | Florence School of Regulation

14.05 – 14.15    The Commission’s proposal
Lukasz Lisicki | Policy Officer, Directorate-General for Energy, European Commission

14.15 – 14.25    The ACER experience
Martin Godfried | Head of the Surveillance and Conduct Department, ACER

Panel Discussion: Introductory Remarks, Polls and Comments
Moderator: Ilaria Conti | Florence School of Regulation

14.25 – 14.55    Introductory remarks from the panellists
Peter Claes | Vice-President, IFIEC
Marilo Garcia Rodriguez | Eurelectric
Tine Bax | Senior Manager EU Affairs, Eurogas
Mike Bostan | Manager, Market Supervision Committee, EFET
Esther Espeja | Market Integrity and Transparency WG Co-Chair, CEER

14.55 – 15.00    Polls

15.00 – 15.15    Comments on the polls outcome and Q&A from the audience
Panellists

15.15 – 15.30    Concluding remarks
Maria da Graça Carvalho | Member of the European Parliament
Ilaria Conti | Florence School of Regulation
Alberto Pototschnig | Florence School of Regulation