FIA EPTA, jointly with FIA and ISDA, has responded to the European Commission’s “Have your Say” on Wholesale energy markets – improving EU protection against market manipulation. This review of the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) is being discussed by co-legislators alongside a review of the EU’s Electricity Market Design.
The associations are concerned about several of the draft amendments in the legislative proposal. These include, for example, that the definition of "Person Professionally Arranging Transactions" is expanded to include a reference to "Persons professionally engaged […] in the execution of transactions in wholesale energy products”. The associations note that the additional reference to "execution" could ultimately capture any person who, as part of their profession, is counterparty to a transaction relating to a wholesale energy product including, for example, any end user buying a wholesale energy product for its energy-intensive industrial process.
The associations further note the proposed changes to Article 9 with respect to third-country firms: Market participants resident or established in a third country shall declare an office in a Member State in which they are active and register with the national regulatory authority of that Member State.
This will create an unjustified and disproportionate market barrier with negative impact on the EU gas and power market and its liquidity, especially as it is unclear whether the proposed change requires establishing an EU branch/entity or if it would suffice to provide an address. Introducing a requirement to establish EU entities would lead to a competitive disadvantage for the European power and gas market as well as a significant reduction in liquidity.
