REMIT Implementation in DONG Energy

DERA Seminar, 27 April 2012

Marie-Louise Piil Christensen

Agenda

3. Insider Trading Policy – Main content

6. Next steps

1. Challenges in relation to REMIT Implementation

2. Overall Approach in DE

4. What have we done – step by step

5. Outstanding issues to be clarified by ACER/Regulatory Authorities

REMIT Implementation – Main Challenges

REMIT Regulation came into force

across Europe on 28 December

2011

Main Challenges:

1)Short time frame for implementation

2)Framework Regulation => Broad and vague wording => Grey areas and uncertainty e.g. in relation to definitions

3)Numerous requirements in order to be compliant

4)Change of "Culture" in some areas of the energy sector

3

'REMIT' Implementation

Overview/Elements/Hierarchies

Overall Compliance Officer (Legal)

Responsible for establishing the overall general guidelines and procedures in cooperation with the

different Business Units

Business UnitCompliance Officer for

EM

Business UnitCompliance Officer for POWER

Business UnitCompliance Officer for

REN

Business UnitCompliance Officer for

GTRM

Business UnitCompliance Officer for

S&D

Business UnitCompliance Officer for

E&P

Responsible for the practical implementation on BU level and compliance

Contains general guidelines for the handling of inside information and other precautions and procedures necessary to ensure DE's compliance with new and existing insider rules

6

Insider Trading Policy

Insider Rules

Market Abuse Directive(MAD)

Financial Instruments

REMITPower & Gas Products

7

Insider Trading Policy

Who are covered?

What is covered?

Establishment of Chinese Walls

Insider lists

Procedures for handling of inside information

Publication of inside information

Sanctions

All directors, managers and employees

Power + gas, transport agreements and related derivatives + financial instruments

Production and trading separated (physically, IT systems etc.)

All employees with inside information are listed on an insider list

Inside information may not be shared with anyone until published to the market

Insider information is published on our websites immediately or ASAP

Not yet known, but probably fines and imprisonment (+ bad publicity)

General information on REMIT + MAD Description on primary obligations and prohibitions, e.g. against insider trading

MAIN CONTENT

8

Implementation Process – Step by Step I

Preperation of Insider Trading Policy for external consultants

Short section on handling of inside info and market abuse rules in overall DE Compliance Program

Development of e-learning programs

Publication meassures

Info meetings and educational sessions for relevant employees

Used when DE engage external consultants, e.g. external lawyers, auditors etc.

Mandatory – Will be rolled out to all DE employees

Short case in overall compliance program and more detailed REMIT specific program for relevant employees

DE Websites and in the future also Energinet.dk

Has been carried out for all relevant employees in DK and abroad.

Deployment of overall DE Insider Trading Policy

Has been published on the Intranet in a Danish and English version + sent out to all relevant employees

Internally in DE

9

Implementation Process – Step by Step II

Compliance Officers have been appointed in all departments

Specific written procedures for handling of inside information etc.

Establishment of overall DE Compliance Log

Participation in working groups and industry organisations

Registration of DE as Energy Trader with Energitilsynet

Bi-weekly meetings have been held with these regarding the implementation process

Have been made and distributed in all departments

And department specific Compliance Logs

To ensure that DE's implementation level is aligned with level in other EU countries and available recommendations

Postponed until mid 2012

Establishment of Insider lists Centrally managed by HR

Internally in DE

Participate in DERA Working Groups(at present WGs on Upstream)

On-going

'DE Register book' – The framework of implementation

10

11

Outstanding issues to be clarified by authorities

Identification of the markets relevant for compliance of the Regulation

Hedging exemption clarification

Publication of availability

Publication Platforms

LNG

Power, gas, balancing markets etc. – European, National or even more local?

Intention and relevance of "unable to meet contractual obligations" condition

Is this technical or commercial availability

There should be one European or National Website, where all inside info must be published

LNG storage is covered by the Regulation – what about LNG Trading?

Definition of Inside Information still unclear

Primarily in relation to thresholds on gas, "precise nature" and "any other information"

Next Steps in the REMIT Implementation Process

Level II – Reporting Obligation•Expected to come into force mid 2013

• Details on the reporting obligation still lacking• Energy companies in EU currently awaiting further details/guidelines

•Internal implementation process expected to last at least 12 months

On going follow-up and monitoring of compliance

Necessary adaptions of internal policies based on coming ACER Guidelines

Registration of DE as Energy Trader with DERA - probably earliest mid 2012