remit webinar 2014

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Complying with REMIT Webinar What energy traders need to be doing now to comply with the regulation Moderator: Fionn O‟Raghallaigh Speakers: Aviv Handler, Gordon Downie 11 November 2014

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Soon energy companies in Europe will have to report all power and gas trades under the regulation on wholesale energy market integrity and transparency, better known as REMIT. The regulation was introduced to tackle insider trading and market abuse in EU energy markets. It defines and prohibits market and obliges firms to report suspicious transaction. Trade reporting will come in six months after the European Commission publishes its implementing acts. This could be any time between now and December, meaning energy companies will need place how they will report trades by May or June next year.

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Page 1: Remit webinar 2014

Complying with REMIT Webinar

What energy traders need to be doing now to comply with the

regulation

Moderator: Fionn O‟Raghallaigh

Speakers: Aviv Handler, Gordon Downie

11 November 2014

Page 2: Remit webinar 2014

www.icis.com

ICIS

Prices

News Analysis

Market intelligence

for the energy,

chemical and

fertilizer industries

Page 3: Remit webinar 2014

www.icis.com

Global Presence, Local Insight

Over 9,200 price assessments in 1,200 reports covering 180 commodities

More than 30 years of industry insight and data

Over 100,000 industry customers

Customers include virtually every major chemical company

Weekly contact with thousands of market participants

17,000+ annual news stories

700+ global employees

New York Washingto

n

Houston

Bogota

London

Dusseldorf

Milan Tokyo

Mumbai

Beijing

Guangzhou

Singapore

Perth

Melbourne

Brisbane

Shanghai

Page 4: Remit webinar 2014

www.icis.com

Content

• 1. Introduction

• 2. REMIT – Preparing for data reporting

• 3. REMIT compliance – legal perspectives

• 4. Q&A

Page 5: Remit webinar 2014

www.icis.com

Introduction

• Regulation to give regulators EU-wide oversight of power

and gas transactions

• Transparency data, whistleblowing, trade data

• European Commission still due to produce final

implementing acts for REMIT

Waiting for the final act

Page 6: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

REMIT – Preparing for data reporting

ICIS Webinar

11th November 2014

Aviv Handler – Managing Director

Page 7: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

The Four Streams of Regulation

7

Trade Reporting

REMIT EMIR MiFID II

Clearing/Margining

EMIR MiFID II

Risk Mitigation

CRDIV EMIR MiFID II

Trade Surveillance

REMIT MAD 2

Uncleared

ETR

Page 8: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

REMIT – Original Official Timetable

Source - Acer

Page 9: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

REMIT – Original Official Timetable

Source - Acer

Likely to be

January 2015

Probably now

9 months

Page 10: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

Regulatory High Level Timings

10

Q3 Q4 Q1 Q2 Q4

2014 2015

EMIR

Mandatory

Clearing

Starts

REMIT

Implemented? REMIT

Standard?

MiFID II?

Margining for

uncleared deals

starts

CEREMP?

REMIT Non

Standard?

Q3 Q1 Q2

2016

Page 11: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

REMIT – Types of Data

• Order data – All pre trade data of trades executed on a venue

• Trade Data –Executions, modifications and terminations for

Standard and Non Standard trades

• Fundamental Data – Physical data such as nominations,

movements etc. – to be reported. There is an overlap with the

upcoming “ETR” rules. Most fundamental data will be reported by

TSOs

• Inside Information – Rules already in force but to be modified

Page 12: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

Formats vs Phases - summary

12

Format Table 1 Format Table 2

9 Months from

Implementing Act*

• On venue trades as listed in the

TRUM

• NA

15 Months from

Implementing Act*

• Off venue trades that are the same

as those listed in the TRUM

• Trades with a fixed volume or price

• All other trade

types

When to report • T+1 • 30 days

*Assuming current draft of Implementing Act goes into force

Tables 3 and 4 cover auctions and transport

Page 13: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

REMIT Data Reporting – Schematic Overview

ACER ARIS

Execution

Venue (non

exchange)

Exchanges

Market

Participant

RRM EMIR

TR O

TC

Tra

de

s, P

os

t

ex

ec

uti

on

eve

nts

fo

r

no

n e

xc

ha

ng

e?

Fo

r s

elf

rep

ort

ing

RR

Ms

Execution Only.

OTC Trades, Post

execution events

for non exchange?

Entire lifecycle

All EMIR fields.

Does not include

orders

Page 14: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

Some Issues

• Who reports?

• Venue or market participant? Venue will not have all of the data, and

may not know about post trade events

• EMIR Trades

• Can rely on TR to report, but pre trade orders must also be reported

• Who will be the RRMs?

• Not many have declared yet

• How does delegation work?

• Many “gotchas”

• Backloading

• Only applies to trades that are “live” on reporting date

Page 15: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

To do – data reporting

Now Registration – Make sure you know which entities to register, where to

register them and have all of the correct information

Data location – Location all of the data you need to report – much of it

won‟t be in your premises

Data preparation – Start your plans now, and properly understand the

Trade Reporting User Manual (TRUM)

Routings - Research different routes by which you can send data

15

Implementing Act Adoption Registration – Register all entities

Data reporting– Kick off all plans to send data straight away, if you haven‟t

already

Routings – select your solution as soon as possible

Stay in touch – keep an eye out for developments and changes

Page 16: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

Contact

Aviv Handler

Managing Director

ETR Advisory Ltd

+44 20 7193 3200

[email protected]

See www.energytradingregulation.com for regular updates

16

Page 17: Remit webinar 2014

Copyright © 2014 ETR Advisory Limited. Not to be redistributed without permission

Legal

• Disclaimer: To the extent permitted by law, neither ETR Advisory Ltd nor its presenters will be

liable by reason of breach of contract, negligence or otherwise for any loss or consequential loss

occasioned to any person acting omitting to act or refraining from acting in reliance upon the

material or presentation,.. Except as expressly and specifically provided in this agreement: you

assume sole responsibility for results obtained from the use of the presentation and for

conclusions drawn from such use. ETR Advisory Ltd shall have no liability for any damage caused

by errors or omissions in any information, instructions or scripts, or any actions taken by ETR

Advisory Ltd; and all warranties, conditions and other terms implied by statute or common law are,

to the fullest extent permitted by law, excluded from this agreement.

• Nothing in this agreement excludes or limits the liability of ETR Advisory Ltd for: death or personal

injury caused by the ETR Advisory Ltd's negligence; fraud or fraudulent misrepresentation; or any

other liability which cannot lawfully be excluded or limited.

• Intellectual property rights: all Intellectual Property Rights and all other rights in the materials

shall be owned by ETR Advisory Ltd.

17

Page 18: Remit webinar 2014

November 2014

Gordon Downie

REMIT Compliance – Legal Perspectives

Page 19: Remit webinar 2014

Key legal obligations

• Insider trading / market abuse bans

• Market disclosure duties

• Duties to „blow the whistle‟ REMIT

• Transaction reporting regime

• Oversight of monitoring/enforcement

Commission & ACER

• Legislation to underpin compliance

• Monitoring/enforcement powers

M/S‟s & NRAs

19 17/11/2014 REMIT Compliance - ICIS Webinar, 11 November 2014

Interaction with

FS regime

(MAR, EMIR)

Interaction with

other legal

norms (e.g.,

criminal law)

Page 20: Remit webinar 2014

Monitoring and enforcement (1)

Investigation

Activity

Whistleblowing

Complaints

Self-reporting

Market

Monitoring

20 17/11/2014 REMIT Compliance - ICIS Webinar, 11 November 2014

Transaction

reporting

Transparency

data

Regulatory

cooperation

Page 21: Remit webinar 2014

Monitoring and enforcement (2)

21 17/11/2014 REMIT Compliance - ICIS Webinar, 11 November 2014

Pro‟s Con‟s

Cross-border

enforcement?

Page 22: Remit webinar 2014

REMIT compliance priorities

22 17/11/2014 REMIT Compliance - ICIS Webinar, 11 November 2014

Systems & processes

Board commitment

Education & training

Audit & improvement

Compliant culture

Page 23: Remit webinar 2014

Questions / discussion

Thank you for

your attention!

23 17/11/2014 REMIT Compliance - ICIS Webinar, 11 November 2014

[email protected]

Page 24: Remit webinar 2014

Thank you for listening

Questions?