REMIT reporting of trades executed on Organised Market Places (OMP) started on October 7, 2015. All other trades, i.e. bilateral trades, need to be reported from April 7, 2016. While the October deadline was largely covered by the OMPs, or other services to carry out the reporting on behalf of the market participant, the April deadline is more complex and requires implementation of the right system solution to meet this challenge best. Pioneer Solutions’ REMIT module is ready to support your Standard- and Non-Standard Contract reporting as well as Electricity and Gas Transportation Contracts. Are you ready for April 7?
REMIT is the Regulation of the wholesale Energy Market Integrity and Transparency. The main objective of REMIT is to outlaw market abuse in the wholesale gas and power market in Europe. Anyone who executes a trade for delivery inside the EU is subject to the rules, no matter where in the world they are based. In order to detect and deter market manipulation, energy trading is screened by the Agency for the Cooperation of Energy Regulators (ACER) and includes mandatory reporting of all physical and financial trades.
Market participants can self-report trades to ACER via a RRM (Registered Reporting Mechanism) however, for the first phase, most participants used the ability of ‘delegated reporting’ whereby exchanges or other parties submitted the standard contract data to ACER on the participant’s behalf. For the second phase, starting April 7, 2016, non-standard trades must be reported to ACER. Non-standard trades are roughly defined as contracts with no defined quantity and price, and/or executed under non-standard contracts. They typically include structured contracts, power purchase agreements or transactions among divisions and are stored in some form of an Energy Trading & Risk Management system (ETRM), like Pioneer’s TRMTracker. Therefore, a self-reporting solution must be found for this – and must be implemented and ready to report by April 7, 2016.
Part of Pioneer’s TRMTracker ETRM system, the REMIT reporting functionality is a standalone module that can support the reporting of all four reports: the standard supply contracts executed on organized market places (Exchanges, such as ICE, APX, EEX), non-standard supply contract, electricity transportation contracts and gas transportation contracts. The module leverages a robust system foundation with the latest in data structure and processing capabilities. It allows the capture of all the required trade data and static data and maps, substitutes and adds data per ACER requirements and outputs in different formats, including ACERXML. In addition, communication such as success messages received from ACER are recorded and can be audited. That is certainly not a luxury as market participants carry to burden to show being compliant and ACER has already identified breaches of the REMIT rules where penalties might be imposed.
Procrastinating implementation on the basis that enforcement will not knock on your door for a while, or that your volume is low now and can be handled manually, merely increases your risk in the future: 1) you run the risk of penalties, 2) your volumes have increased to the point that data cannot be easily retrieved anymore to use a delegated reporting model, and 3) you will be exposed to another deadline by which trade date from before April 7 must be reported under the backloading rule. Moreover, you are putting your reputation, perhaps your trading license, at risk and therefore your business.
The deadline of April 7 is approaching fast. While trade volumes of standard contracts might be much higher in volume, the reporting capability of non-standard contract introduces a much higher degree of complexity as this cannot be delegated because only the market participant holds the trade data. Now is the time to implement a solution to ensure efficient, timely, complete and accurate reporting. Considering the time left, Pioneer Solutions can help with its REMIT reporting module. And knowing ACER will introduce ongoing changes to its REMIT reporting requirements, when your existing ETRM environment is running out of steam, Pioneer can offer you a migration path to its full front-to-back TRMTracker ETRM system as well.