Regulation on Wholesale Energy Market Integrity and Transparency (REMIT)
The Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) is an EU regulation designed to increase the transparency and stability of the European energy markets while combating insider trading and market manipulation.
The main purpose behind REMIT is to outlaw market abuse in the wholesale gas and power market in Europe. REMIT is part of the “third package” of rules that are intended to move the EU towards a single wholesale market.
REMIT applies to all physical and financial trades, and also includes liquefied natural gas (LNG) where the supply is intended for the EU network.
REMIT provides a consistent EU-wide regulatory framework specific to wholesale energy markets that:
- defines market abuse including market manipulation, attempted market manipulation or insider trading,
- explicitly prohibits market abuse,
- requires effective and timely public disclosure of inside information by market particpants,
- obliges firms professionally arranging transactions to report suspicious transactions.
Anyone who executes a trade for delivery inside the EU – no matter where in the world they are based – is subject to the rules. In this sense, REMIT is distinct from many financial regulations. REMIT is enforced by National Regulatory Authorities (NRAs), who are local energy regulators. For example, Ofgem enforce REMIT in the GB market using specifically drafted UK regulation which has extended their powers of enforcement (Northern Ireland is covered by the “Utility Regulator”). The entire effort is coordinated on an EU-wide basis by ACER, the Agency for the Cooperation of Energy Regulators.
REMIT creates a very important framework for identifying and penalising market abuse in Europe. This helps consumers, industry and other participants have confidence that wholesale energy prices are open, fair and competitive, the foundations of an effectively functioning energy market.
All participants trading wholesale gas or electricity contracts for delivery in Europe are affected. They have the obligation to report information about their trading on Organised Market Places as well as outside Organised Market Places.
REMIT entered into force in December 2011, twenty days after the “Level 1” text was passed by the European Parliament.
REMIT: the highlighted parts of the value chain are affected