REMIT Accepted Market Practices (AMPs)
According to Article 2(2)(a)(ii) of Regulation 1227/2011/EU of the European Parliament and the Council on wholesale energy market integrity and transparency (REMIT) ‘market manipulation’ consists in, among other things, entering into any transaction or issuing any order to trade in wholesale energy products which “secures or attempts to secure, by a person, or persons acting in collaboration, the price of one or several wholesale energy products at an artificial level, unless the person who entered into the transaction or issued the order to trade establishes that his reasons for doing so are legitimate and that that transaction or order to trade conforms to accepted market practices on the wholesale energy market concerned”.
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Recital (27) of REMIT mandates the ACER to ensure that REMIT is applied in a coordinated way across the European Union, coherent with the application of Directive 2003/6/EC (MAD), replaced by Regulation 596/2014/EU (MAR). To that effect, the said EU Agency is granted the competence to publish non-binding guidance on the application of the REMIT definitions, which should address, inter alia, the issue of accepted market practices (AMPs). Taken together, the above provisions would allow a person suspected of market manipulation to absolve itself (in the prescribed situations) of indictment, the problem is there aren’t any REMIT AMPs, at present.
 Links
ESMA's website on Accepted Market Practices
ESMA's document Frequently Asked Questions Accepted Market Practices (AMP) |
Although a handful of AMPs were issued in the financial sector, none of them are applicable in the energy sector (CEER Note on Accepted Market Practices in the Energy Sector, 16 April 2019, Ref: C18-MIT-79-04). As CEER further indicates, currently “there is no possibility for market participants to conform to an AMP with respect to an assessment whether a transaction is compliant with article 5 of REMIT since no Member State has adopted AMPs for the energy sector”.
It is noteworthy, the relevance of REMIT AMPs is statutory limited to price positioning (Art. 2(2) (ii) REMIT vs Art. 1(2) MAD).
REMIT abstains from setting an AMPs’ definition, instead it makes a reference in Recital 14 to the financial set-up (i.e. to Article 1(5) of MAD), which, equally, at EU and at national levels, have provided greater clarity on AMPs:
- European Commission's ′′level 2′′ guidance in Directive 2004/72 enumerates factors to be taken into account when considering whether an action constitutes an AMP,
- CESR's first set of level 3 guidance lists examples of practices that do not constitute AMPs.
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CEER Note on Accepted Market Practices in the Energy Sector, 16 April 2019, Ref: C18-MIT-79-04 Regulation 1227/2011/EU of the European Parliament and the Council on wholesale energy market integrity and transparency (REMIT) has established a robust legal framework to deal with market abuses in the wholesale energy sector. Article 5 of REMIT sets out a prohibition on market manipulation declaring a wide range of behaviours illegal. The definitions in Article 2 of REMIT for market manipulation and attempted market manipulation allude to the notion of ”accepted market practices” (AMP). This allows market participants to claim that a certain type of behaviour is legitimate and that that transaction or order to trade conforms to accepted market practices on the wholesale energy market concerned. Currently a handful of AMPs are in effect in the financial sector, none of them are applicable in the energy sector. The result of a CEER questionnaire to National Regulatory Authorities of the EU and EEA Member States shows that respondents have no national rules on establishing AMPs in the energy sector, have not established any AMP under REMIT and do not plan to do so. To that effect pursuant to Article 16(1) of REMIT, ACER can publish non-binding guidance on the application of the definitions set out in REMIT, as appropriate. Currently there is no possibility for market participants to conform to an AMP with respect to an assessment whether a transaction is compliant with article 5 of REMIT since no Member State has adopted AMPs for the energy sector. |
