According to the rules of the REMIT transactions and orders reporting scheme, executions concluded within the framework of the non-standard contracts are reportable no later than 30 days after the invoicing date using Table 1 of the Annex of the REMIT Implementing Regulation (field 22 (Contract Name)).
Reported executions need to be linked to non-standard contracts that have already been reported with Table 2.
The above approach is based on the broader assumption that each exercise of the contractual right is a reportable transaction under REMIT.
Backloading
Executions under non-standard contracts are not subject to back loading reporting.
Since there is a three-month period time for the back loading of outstanding non-standard contracts, transactions executed under the framework of non-standard contracts are reportable if they take place after the reporting of the back loaded report (ACER's Frequently Asked Questions (FAQs) on REMIT transactions reporting, Question 3.6.1).
Executions under the framework of non-standard contracts with a delivery period ending before the nonstandard contract is back loaded do not need to be reported.
UTI
Within the REMIT transactions and orders reporting framework executions are specific when it comes to the rules for assigning the Unique Trade Identifier (UTI).
The said specificity consists in that the UTI for executions need not to be agreed with counterparties to the trade.
In particular, according to the Agency for the Cooperation of Energy Regulators (ACER) there is no expectation that the buyer and seller unique number for the execution will have to be the same. This is a unique number that will identify the report uniquely.
The Unique Number can be any number the market participant likes as long as it is unique for that market participant and not used for other executions.
It could be, for example, any progressive unique number for the market participant who is reporting the execution.
Timing of the reporting for life-cycle events
With regard to the timing of the reporting, if a "new" report is due to be reported on T+1 basis, all the life cycle events related to that report have to be reported on a T+1 basis.
If a "new" report is due to be reported on T+1 month basis, all the life cycle events related to that report have to be reported on a T+1 month basis.
See below the boxes for ACER's clarifications on executions' reporting under the framework of non-standard contracts.
Clarification of outright volume and price and reporting frequency for transactions executed within the framework of non-standard contracts
Details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price shall be reported using Table 1 of the Annex to the Implementing Acts.
With regard to "specifying at least an outright volume and price", the Agency understands that once the volume and the price of the transaction is known to the two parties (which can occur after the delivery of the commodity), the transaction is complete.
There is little difference between a physical spot/forward contract traded at an organised market place with a price settled against an index and an execution under non-standard contract framework which settles days after the delivery of the energy commodity ends. In fact, both of these two contracts may not have a fixed price or volume before the delivery of the energy commodity starts and, most likely, both of them will be completely settled after the delivery period ends.
However, while the physical spot/forward contract traded on an organised market place is reported with the contracted volume and the fixing index (which most likely is publicly available), the transaction executed under the framework of a non-standard contract has to be reported once the delivered quantity and the price are known, but still using Table 1 of the Annex to the Implementing Acts.
As far the Agency is aware, details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price are available to both parties to the contract by the invoicing date at the latest. On that basis, those executions under the framework of non-standard contract are reportable no later than 30 days after the invoicing date using Table 1 of the Annex of the Implementing Acts.
Trade Reporting User Manual (TRUM) point 3.2.6, p. 20
"EXECUTION": should be reported in field 22 (Contract Name) of Table 1 to identify the reporting of the details of transactions executed within the framework of non-standard contracts specifying that transactions can to be reported on a monthly basis. Executions under non-standard contracts are not subject to back loading reporting.
For the purpose of the reporting of the details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price, reportable with Table 1 of the Annex to the Implementing Acts, the Agency understands that these transactions should be reported according to the billing cycle industry standards as the invoicing date is the last point in time that price and quantity can be discovered.
REMIT - examples of transaction reporting, p. 6
Frequently Asked Questions (FAQs) on REMIT transaction reporting II.3.4
Executions under non-standard contracts
Question 3.4.1
Modification of Execution events. When we are sending an execution event in Table1 that links to a trade in Table2 the examples say that the UTI of those events is "NA". This would work for the New event. What would we do if there is the need to modify an execution event if there is no unique ID on the original "New" record?
Answer
The Agency has received additional input from its stakeholders who raised the issue of the modification of the EXECUTION report. They suggested to allow for the reporting of a unique number in the UTI field in case of modification.
Please note that for the purpose of the reporting of the details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price and reportable with Table 1 of the Annex to the Implementing Acts, the examples presented in Annex II to the TRUM have been modified to reflect the input provided by the industry to the Agency.
In particular, the Agency's stakeholders have highlighted and requested the need to assign a unique number to the each execution reports in Field (31) Unique Transaction ID of Table 1.
This requirement makes sure that in case it is needed to report a modification report this can be submitted to modify a previously reported execution uniquely identified in Field (31) Unique Transaction ID of Table 1.
The Unique Number can be any number the market participant likes as long as it is unique for that market participant and not used for other executions. It could be, for example, any progressive unique number for the market participant who is reporting the execution.
There is no expectation that the buyer and seller unique number for the execution will have to be the same. This is a unique number that will identify the report uniquely.
Question 3.4.2
What UTI should be reported for the reporting of EXECUTIONS where the Market Participant does not have a UTI for the trade?
Example: Prior to Oct 7, participant enters into a trade. No UTI is assigned to the trade. Trade is still open on Oct 7 and therefore needs to be reported as a back loaded trade.
The Market Participant may omit the UTI for such trades
Answer
The UTI is a mandatory field in the schema. For executions under the framework of non-standard contracts where the market participant does not have an UTI for the trade, the market participant should create one.
The UTI is needed for the ID of the record, otherwise the market participant will not be able to make any amendments and/or recall the transaction.
The UTI can be anything the market participant would like to submit e.g. the transaction ID available in their system.
Question 3.4.3
We need to understand how quantity data for Non-Standard Contracts are required for transaction reporting according to REMIT.
We act as Direct Marketer in Germany with a portfolio of wind and solar based virtual power plants. Typically these PPAs are agreed with a 1-2 year duration. We just purchase from the power plant operator the whole production based on actual values.
When we sign the contract we need to report such a new deal with Action Type New and Quantity field empty (because the actual values are not available yet. The actual values are available from the DSOs (around 99% completeness) until 10 working days after each delivery month, and they are usually available with 100% completeness before the Balance Circle Agreement (8 months after delivery month).
The question is now when we need to report modified transactions for these PPAs and based on which data? Shall we report each month the actual values of the previous delivery month even if they are not yet complete?
Another question is the 30 day rule. Is the obligation to report the transaction within 30 days only related to new transactions (Action Type new) or also related to any modifications later on?
Further question regarding Field 41 Delivery Area: What should be represented by this Y EIC Code – the TSO area (which is a 16 digits Y Code) or the DSO Delivery area (which is a 16 digits Y Code as well). I´m already sure the balance circle of the Balance Responsible is not meant as this a 16 digits X Code.
Answer
For the purpose of the reporting of the details of transactions executed within the framework of non-standard contracts specifying at least an outright volume and price, reportable with Table 1 of the Annex to the REMIT Implementing Regulation (EU) No 1348/2014, the Agency understands that these transactions should be reported according to the billing cycle industry standards as the invoicing date is the last point in time that price and quantity can be discovered.
The Agency understands that the billing cycle industry standards refer to calendar months and therefore twelve transactions per year (if the executions take place every month of the year) are expected to be reported not later than 30 days after the discovery of price and quantity. Although the actual values are available from the DSOs, the Agency currently would not expect any life-cycle event based on actual values available from the DSOs.
With regard to the timing of the reporting, if a "new" report is due to be reported on T+1 basis, all the life cycle events related to that report have to be reported on a T+1 basis. If a "new" report is due to be reported on T+1 month basis, all the life cycle events related to that report have to be reported on a T+1 month basis.
With regard to the second part of the question, as indicated in the TRUM, Field 41 Delivery Area identifies the commodity delivery point or zone. In this specific case, the delivery area is the TSO EIC Y code of the balancing area for which the market participant has a balancing agreement with the TSO. This is the area where the market participant delivers the energy commodity through nominations/scheduling.
Question 3.4.4
In our opinion the transaction executed under the framework of a non-standard contract (paragraph 3.2.6 of the TRUM in the separated box), is the inception of the contract itself (i.e. signature of the contract) or contractual amendments issued. On the contrary the specific lifecycle events that occur after the signature (e.g. price switch, additional quantities) are the mere exercise of a contractual right. Could you confirm it?
Answer
In the Agency's view the explanation in paragraph 3.2.6 of the Transaction Reporting User Manual (TRUM) in the separated box is clear: each exercise of the contractual right is a reportable transaction.
Question 3.4.5
In our opinion the transaction executed under the framework of a non-standard contract (paragraph 3.2.6 of the TRUM in the separated box), is the inception of the contract itself (i.e. signature of the contract) or contractual amendments issued. On the contrary the specific lifecycle events that occur after the signature (e.g. price switch, additional quantities) are the mere exercise of a contractual right. Could you confirm it?
Answer
Please refer to the explanation in point 3.2.6 of the TRUM in the separated box: Each exercise of the contractual right is a reportable transaction.
Question 3.4.7
Reference to documents: TRUM 2.0 page 20
We would like to discuss a trading example and ask you how to report it:
Scenario:
• Company A sells electricity (bilateral, physical settlement) to Company B for the whole year to spot market conditions
• Company B pays twelve equal monthly payments to Company A. The amount of the payments is estimated before the beginning of the year. The estimation is based on the volume that was sold the year before and the estimated prices in this year. The monthly bills therefore don’t display a volume.
• At the end of the year, there is a final invoice. The final invoice is offset with the twelve payments.
The final invoice displays the sold volume in this year (it is calculated after the whole year) and the calculation of the difference between the twelve monthly payments and the sold volume to a specific price (derived by the spot market).
The final invoice can be positive or negative depending on whether the sum of the monthly payments is above or below the sold volume x sold price.
In our understanding we should use REMIT Table 2 scheme to report the contract (no quantity and price is known before the final invoice).
And for the execution it is our understanding that we report the transaction for the whole year using the final invoice with the defined price and volume at the end of the year (table 1)?
In our understanding we shouldn’t report the monthly payments (TRUM 2.0 page 20) because there is no specifying of an outright volume and price.
Answer
Based on the information provided above, it is our view that the contract should be reported by using Table 2 and one EXECUTION at the end of the year. Please note that this would apply only to contract with pre-payments.
Question 3.4.8
The question is about submitting the notional amount (Data Field R1.38). We would do so in a monthly rhythm.
There are three dates where we get new information about the amount in month M, i.e. M+1WD, M+14WD, and 2M-10WD (WD being working days).
The initial amount could be corrected twice in the course of two month following the month of delivery.
We wonder if we are to correct execution messages as well and if we have to do so every month separately or after the end of the calendar year for the whole delivery year.
In the FAQ document we found Question 3.4.3 which reads that “...the Agency currently would not expect any life-cycle event based on actual values available from the DSOs.”
How is this quote to be interpreted to the effect of submission of executions?
Answer
As stated in FAQ 3.4.3 there is no expectation to update submitted EXECUTION reports unless Market Participants prefer to do so.
Frequently Asked Questions (FAQs) on REMIT transaction reporting
Question 3.1.37
Reference to documents: REMIT Implementing Regulation Article 5
Definitions of known price and volume for reportable executions are unclear. For non- standard supply contracts of gas or electricity, where there is not a fixed price commodity rate defined in the contract, which volume and price is considered to be the reportable execution?
Example: If a customer makes multiple forward-purchases ahead of a delivery month through their supplier for a specific volume for this specific delivery month at a specific price, with any remaining un-hedged volume then priced on a market index; all of which are subsequently used in calculating a weighted average invoice unit rate; what should the customer report?
1. Each trade made at the time of trade, only.
2. Each trade made at the time of trade, and the remaining volume on the index price at time of invoicing (once volume and price are known).
3. Just the final weighted-average unit rate and total consumption at time of invoicing (and then a final monthly average, or each settlement period price).
Our view: Option 1 above.
It is our understanding that only the executions for forward purchases are reportable as it is these transactions which could affect the market.
Answer
Based on the information provided above, it is our view that all the contracts have to be reported. If the forwards with defined price and quantity are agreed and the price remains unchanged, then these contracts have to be reported as BILATERAL contracts. Any remaining un-hedged volume priced on a market index should be reported as EXECUTIONS. Please see FAQ 3.1.28
Question 3.6.4
Related documents: II.3.6 of the Frequently Asked Questions
Question relates to the reporting of executions under back loaded nonstandard contracts.
According to II.3.2 of FAQs, an execution completed before 7 April 2016 does not need to be reported. Executions with delivery period extending beyond 7 April 2016 need to be reported. However, as the deadline for backloading of nonstandard contracts is 7 July 2016, the questions are:
a. Does an execution with a delivery period ending before the nonstandard contract is back loaded need to be reported?
b. If yes, what is the deadline for reporting such an execution? Should it be reported within 30 days of the end of the delivery period, even if this is a date earlier than 7 July 2016 (in which case the nonstandard contract should be back loaded not later than the date of reporting of the execution)? Or should such an execution be reported only when the nonstandard contract is back loaded, even if this falls later than 30 days from the end of the delivery period of the execution.
Answer to the second question of II.3.6 of FAQs (which probably should be properly marked as question 3.6.2, instead of 3.6.1) suggests that only executions with delivery periods ending after a nonstandard contract is actually back loaded are reportable. This would mean that executions with delivery period ending after 7 April 2016 but before the nonstandard contract is actually back loaded (which can happen by 7 July 2016) would not be reportable at all. We are not clear if this was the actual intention of the Agency.
As a follow up question: when new executions of a back loaded contract are reported after the backloading is done, do the data reported by each of the counterparties regarding such executions need to match? Many Xxxx market participants are reporting to me that they have significant difficulties in agreeing with some counterparties how the historical contracts are to be reported and it is quite likely that several back loaded contracts will be reported by each of the respective counterparties differently (with non-reconciled data). I would greatly appreciate your input on this. My understanding is that in case of back loaded contracts both data reported by the two counterparties under table 2 and data reported under table 1 for executions of back loaded contracts are not required to match.
Answer
Executions under the framework of non-standard contracts with a delivery period ending before the nonstandard contract is back loaded do not need to be reported.
Criteria for back loading are more relaxed. Please refer to TRUM Annex II, e.g. Example 4.05 to see the differences in the back loaded contract reported by two counterparties.