remit webinar 2014
DESCRIPTION
Soon energy companies in Europe will have to report all power and gas trades under the regulation on wholesale energy market integrity and transparency, better known as REMIT. The regulation was introduced to tackle insider trading and market abuse in EU energy markets. It defines and prohibits market and obliges firms to report suspicious transaction. Trade reporting will come in six months after the European Commission publishes its implementing acts. This could be any time between now and December, meaning energy companies will need place how they will report trades by May or June next year.TRANSCRIPT
Complying with REMIT Webinar
What energy traders need to be doing now to comply with the
regulation
Moderator: Fionn O‟Raghallaigh
Speakers: Aviv Handler, Gordon Downie
11 November 2014
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Content
• 1. Introduction
• 2. REMIT – Preparing for data reporting
• 3. REMIT compliance – legal perspectives
• 4. Q&A
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Introduction
• Regulation to give regulators EU-wide oversight of power
and gas transactions
• Transparency data, whistleblowing, trade data
• European Commission still due to produce final
implementing acts for REMIT
Waiting for the final act
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
REMIT – Preparing for data reporting
ICIS Webinar
11th November 2014
Aviv Handler – Managing Director
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The Four Streams of Regulation
7
Trade Reporting
REMIT EMIR MiFID II
Clearing/Margining
EMIR MiFID II
Risk Mitigation
CRDIV EMIR MiFID II
Trade Surveillance
REMIT MAD 2
Uncleared
ETR
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REMIT – Original Official Timetable
Source - Acer
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
REMIT – Original Official Timetable
Source - Acer
Likely to be
January 2015
Probably now
9 months
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
Regulatory High Level Timings
10
Q3 Q4 Q1 Q2 Q4
2014 2015
EMIR
Mandatory
Clearing
Starts
REMIT
Implemented? REMIT
Standard?
MiFID II?
Margining for
uncleared deals
starts
CEREMP?
REMIT Non
Standard?
Q3 Q1 Q2
2016
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
REMIT – Types of Data
• Order data – All pre trade data of trades executed on a venue
• Trade Data –Executions, modifications and terminations for
Standard and Non Standard trades
• Fundamental Data – Physical data such as nominations,
movements etc. – to be reported. There is an overlap with the
upcoming “ETR” rules. Most fundamental data will be reported by
TSOs
• Inside Information – Rules already in force but to be modified
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
Formats vs Phases - summary
12
Format Table 1 Format Table 2
9 Months from
Implementing Act*
• On venue trades as listed in the
TRUM
• NA
15 Months from
Implementing Act*
• Off venue trades that are the same
as those listed in the TRUM
• Trades with a fixed volume or price
• All other trade
types
When to report • T+1 • 30 days
*Assuming current draft of Implementing Act goes into force
Tables 3 and 4 cover auctions and transport
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
REMIT Data Reporting – Schematic Overview
ACER ARIS
Execution
Venue (non
exchange)
Exchanges
Market
Participant
RRM EMIR
TR O
TC
Tra
de
s, P
os
t
ex
ec
uti
on
eve
nts
fo
r
no
n e
xc
ha
ng
e?
Fo
r s
elf
rep
ort
ing
RR
Ms
Execution Only.
OTC Trades, Post
execution events
for non exchange?
Entire lifecycle
All EMIR fields.
Does not include
orders
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
Some Issues
• Who reports?
• Venue or market participant? Venue will not have all of the data, and
may not know about post trade events
• EMIR Trades
• Can rely on TR to report, but pre trade orders must also be reported
• Who will be the RRMs?
• Not many have declared yet
• How does delegation work?
• Many “gotchas”
• Backloading
• Only applies to trades that are “live” on reporting date
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
To do – data reporting
Now Registration – Make sure you know which entities to register, where to
register them and have all of the correct information
Data location – Location all of the data you need to report – much of it
won‟t be in your premises
Data preparation – Start your plans now, and properly understand the
Trade Reporting User Manual (TRUM)
Routings - Research different routes by which you can send data
15
Implementing Act Adoption Registration – Register all entities
Data reporting– Kick off all plans to send data straight away, if you haven‟t
already
Routings – select your solution as soon as possible
Stay in touch – keep an eye out for developments and changes
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
Contact
Aviv Handler
Managing Director
ETR Advisory Ltd
+44 20 7193 3200
See www.energytradingregulation.com for regular updates
16
Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission
Legal
• Disclaimer: To the extent permitted by law, neither ETR Advisory Ltd nor its presenters will be
liable by reason of breach of contract, negligence or otherwise for any loss or consequential loss
occasioned to any person acting omitting to act or refraining from acting in reliance upon the
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Advisory Ltd; and all warranties, conditions and other terms implied by statute or common law are,
to the fullest extent permitted by law, excluded from this agreement.
• Nothing in this agreement excludes or limits the liability of ETR Advisory Ltd for: death or personal
injury caused by the ETR Advisory Ltd's negligence; fraud or fraudulent misrepresentation; or any
other liability which cannot lawfully be excluded or limited.
• Intellectual property rights: all Intellectual Property Rights and all other rights in the materials
shall be owned by ETR Advisory Ltd.
17
November 2014
Gordon Downie
REMIT Compliance – Legal Perspectives
Key legal obligations
• Insider trading / market abuse bans
• Market disclosure duties
• Duties to „blow the whistle‟ REMIT
• Transaction reporting regime
• Oversight of monitoring/enforcement
Commission & ACER
• Legislation to underpin compliance
• Monitoring/enforcement powers
M/S‟s & NRAs
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Interaction with
FS regime
(MAR, EMIR)
Interaction with
other legal
norms (e.g.,
criminal law)
Monitoring and enforcement (1)
Investigation
Activity
Whistleblowing
Complaints
Self-reporting
Market
Monitoring
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Transaction
reporting
Transparency
data
Regulatory
cooperation
Monitoring and enforcement (2)
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Pro‟s Con‟s
Cross-border
enforcement?
REMIT compliance priorities
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Systems & processes
Board commitment
Education & training
Audit & improvement
Compliant culture
Questions / discussion
Thank you for
your attention!
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Thank you for listening
Questions?