Intra-group transactions and orders' reporting are areas where both schemes should not be commuted for...
Both schemes require maximum attention to ensure compliance. Detailed and extensive manuals for those engaged are inevitable.
Take for instance certain nuances, however, of a fundamental character.
Firstly, intra-group transactions - under EMIR reportable, under REMIT draft implementing acts - not.
Secondly, orders to trade reporting - under REMIT reportable, under EMIR - not.
I'm sure there are many other subtle discrepancies, having potential to confuse players active in both segments of the market.
Are such divergences entirely reasonable? Are the underlying reasons of such an importance to prevail over the need for consistency and uniformity of reporting schemes to facilitate compliance?
The fact, both reporting regimes are partly overlapping, notwithstanding.
It clearly follows from the draft TRUM, which as for reporting derivatives contracts stipulates that where persons have reported details of transactions in accordance with Article 26 of MiFIR or Article 9 of EMIR, their obligations in relation to reporting those details under REMIT shall be considered as fulfilled.
However, subject to the agreement of organised markets, trade matching or reporting systems, those information may be reported directly to the ACER.
Therefore, information on derivatives reportable under EMIR and MiFIR may either be made available to the Agency in the EMIR /MiFIR format or reported directly to the ACER in the REMIT format.
Furthermore, derivatives contracts covered by the draft implementing acts but not reportable under EMIR or MiFIR] (e.g. in a case of market participants not established or resident in the Union and not reporting those derivatives under EMIR or MiFIR), must be reported in accordance with the REMIT draft implementing acts as regards contracts.
Do not forget, we have also MiFID II and its self-standing and separate reporting system, ARMs, etc. and MiFID II in some areas crosses it traditional financial scope (to recall for instance the NFCs+ and the trading obligation).
No doubt, compliance departments of not only financial firms, but also simple commodity traders, industrials as well as electricity generators will have to bother...
However, some additional burdens on the part of market players notwithstanding, the divergences at issue may rise additional, more far-reaching consequences. There should be consciousness EMIR and REMIT reporting databases will not be easily comparable when it comes to volumes, prices etc.
Intra-group transactions may pose quite big piece of the market, not available under REMIT reporting scheme (only on request of the ACER). Moreover, absence of orders data in the EMIR infrastructure seems to be a shortcoming where there will arise a need to make comparisons with contracts that qualify as wholesale energy products.
A general reflection is, wholesale energy products are category, where the differences between commodity and derivatives' markets appear particularly vague (see for instance on the MiFID II ground the so-called "REMIT carve-out) and, thus, should represent an area of particular interest of compliance departments.