In connection with the above-mentioned CEER’s remarks a reflection comes to mind that the requirement for market participants to have procedures in the fields concerned, currently enforced by REMIT is (or, at least, shoud be) already familiar to members of energy exchanges due to their market rules and regulations.

 

The requirement stressed by the CEER leading to necessity to establish “Chinese walls” between trading under different ‘reasons for market intervention’ like e.g. physical state of the assets and e.g. client needs, otherwise it can lead to conflict of interests, seem to be more burdensome – in particular in vertically integrated undertakings, where related entities may be treated by the trading arm of the said group like ‘clients’.

 

REMIT itself treats parent undertakings and related undertakings as a single economic entity (see Article 4(1) first sentence: ‘Market participants shall publicly disclose in an effective and timely manner inside information which they possess in respect of business or facilities which the market participant concerned, or its parent undertaking or related undertaking, owns or controls or for whose operational matters that market participant or undertaking is responsible, either in whole or in part’).

It follows that since REMIT does not precise which of inter-related undertakings in the capital group should be operationally burdened with the obligation to publish inside information, and the said group could be perceived as a single economic entity, there arises an ambiguity, whether the establishment of the ‘Chinese walls’ between different trading reasons realised within the same group could be in this case effective. Furthermore, groups of related undertakings generally pursue a common and coherent business strategy and business model which should be known to particular business lines, so this circumstance could also be an obstacle to the functioning of “Chinese wall” between different ‘trading reasons’.

 

So, the ACER guidelines mentioned at the beginning are only ‘first edition’ and further clues from the European energy regulator should be expected in the future. Maybe in the consequent releases ACER will make his views known also as regards this issue.