Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency (REMIT)
The Commission Implementing Regulation (EU) No. 1348/2014 on data reporting implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency
Requirements for the registration of RRMs (Trade and Fundamental data)
Technical Specifications for RRMs
Transaction Reporting User Manual (TRUM)
Manual of Procedures on Fundamental Data Reporting
The final text of REMIT was adopted on 8 December 2011, coming into force on 28 December 2011.
The Commission Implementing Regulation (EU) No. 1348/2014 on data reporting implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency was published in the Official Journal of the EU
on 18 December 2014, coming into force as of 7 January 2015. Reporting of the standard contracts trade data concluded on organised markets will commence on 7 October 2015. Afterwards Market Participants will have 90 days from the commencement of trade reporting to report all outstanding standard contracts. Reporting of all other trade and fundamental data will commerce on 7 April 2016.
The reporting obligations of trade and fundamental data related to any wholesale energy products should be considered as the most significant impact. Not reporting accurately or being able to demonstrate to regulators appropriate process control and governance is in place could cause significant corporate fines, prosecution, reputational damage and potentially a denial to operate. Recently the national regulators have also enforced significant penalties for market participants breaching REMIT requirements. In addition to fines, firms are faced with the cost of submitting reports.
Who is Market Participants?
REMIT is applicable for any market participant that is defined as any natural or legal person who enters into transactions, including the placing of orders to trade, in one or more wholesale energy markets. REMIT affects everyone who participates in, or whose conduct affects, wholesale energy
markets within the Union. It makes no difference whether or not the person is resident within the EU or not. Also non-EU and non-EEA market participants are covered by REMIT if entering into transactions, including the placing of orders to trade, in one or more wholesale energy markets in the Union.
What are Wholesales Energy Products?
Article 2(4) of REMIT defines wholesale energy products as follows:
"wholesale energy products" means the following contracts and derivatives, irrespective of where and how they are traded:
Furthermore, Article 2(4), second subparagraph, states that:
Contracts for the supply and distribution of electricity or natural gas for the use of final customers are not wholesale energy products. However, contracts for the supply and distribution of electricity or natural gas to final customers with a consumption capacity greater than the threshold (currently 600GWh) shall be treated as wholesale energy products.
For the purposes of REMIT, the definition of final customer means “a customer purchasing electricity or natural gas for his own use”.
Additionally Article 2(5) of REMIT clarifies the notion of “consumption capacity” relevant for the understanding of the notion of “wholesale energy products” as a "consumption capacity" that means the consumption of a final customer of either electricity or natural gas at full use of that customer's production capacity. It comprises all consumption by that customer as a single economic entity, in so far as consumption takes place on markets with interrelated wholesale prices. For the purposes of this definition, consumption at individual plants under the control of a single economic entity that have a consumption capacity of less than 600 GWh per year shall not be taken into account in so far as those plants do not exert a joint influence on wholesale energy market prices due to their being located in different relevant geographical markets.
What is Wholesale Energy Market
Article 2(6) of REMIT defines a wholesale energy market as follows:
“wholesale energy market“ means any market within the Union on which wholesale energy products are traded. According to Recital 5 of REMIT, wholesale energy markets encompass both commodity markets and derivative markets, which are of vital
importance to the energy and financial markets, as price formation in both sectors is interlinked. They include, inter alia, regulated markets, multilateral trading facilities and over-the-counter (OTC) transactions and bilateral contracts, traded directly or through brokers.