REMIT reporting - modification of the contract price or quantity during delivery period

Frequently Asked Questions (FAQs) on REMIT transaction reporting

Question 3.1.5

... If a given trade for example, for the year 2016, is decided to be changed in the middle of the year - either the price or the quantity of trade to be increased or decreased, then shell we just send the correction for the period in which the change is going to be or to generate again a new report for the hole period? In other words: we have a trade for power block which is EU peak for a whole year of 2016. We've already sent a remit report for that trade on the day D+1 from the trade date. Then, in a few months, during the delivery period, we decide to buy more energy just for one week for example in august. Shall we generate a new report in which we'll have a separate display for every week in the year or shall we create a new report just for that specific week for which we made changes?

Answer

... In the Agency's view, when an original trade for a given period of time has already been reported, and a new agreement/modification occurs during the delivery period, the Agency would expect a separate new trade to be reported.

Question 2.4.10

Lifecycle events reporting:

For a reported trade, during the delivery period, the two parties agree to amend the price and the quantity. The two market participants report the trade modification and they have to report “Total Notional Contract Quantity” and “Notional Amount” in accordance with TRUM and “Open letter on REMIT transaction reporting data quality” (16 February 2017). Please let us know what is the proper way to calculate “Total Notional Contract Quantity” and “Notional Amount” in this case (trade modification).

Answer

According to the Agency’s understanding, if for a reported trade, during the delivery period, the two parties agree to amend the price and the quantity, this is a new transaction. The early termination should be reported first and the new contract should be reported after. We do understand that market participants may treat this contract as the same contract. But we believe that while it is treated by the system as the same contract, this is in effect a new transaction executed at a different point in time, with different market information leading to different economics.

Example: MP1 and MP2 agree in September 2016 on a yearly supply (forward) contract for the delivery of 10MW at 30 EUR/MW. In the course of July 2017 (or any month during the delivery of such a contract) the two parties decide to change the price or quantity. A termination “C” of the previous agreement should be reported, as well as a new transaction “N” with a new UTI with the new price and quantity (and delivery period left).

Please note that this applies to Table 1 only when both price and quantity were already agreed on. For Table 2 it is reasonable to believe that the terms and conditions of these contracts may be modifiable and such modifications can be reported with “M” Modify type lifecycle event.