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securing competitive energy for industry IFIEC RESPONSE ON THE ACER REMIT CONSULTATION General remarks: CEFIC-IFIEC welcomes REMIT to improve the confidence of the whole sales market by setting common rules on the prohibition of market abuse. However the current Regulation contains a lot unclear definitions and leads to unacceptable not answered d questions and uncertainty. An example is the definition of inside information’ meaning information of a precise nature which has not been made public, which relates, directly or indirectly, to one or more wholesale energy products and which, if it were made public, would be likely to significantly affect the prices of those wholesale energy products. Industrial end users buy energy for own use and not for trading. It is hard to consider under what circumstances these trades related to its sourcing will significantly affect the prices. It is more likely that the opposite is true; in case end-consumers are forced to trade for instance because of an unplanned shut down, suppliers are able to abuse this information. For the European energy intensive Industry it is to be expected that costs will rise significantly, when the 600 GWh limit per year will be applied. Unnecessary costs will be the consequence. Question 1 Do you agree with the proposed definitions? If not, please indicate alternative proposals. We recommend to be aligned as much as possible with the definitions used in other Regulations or general accepted (Master) agreements like EFET etc. Question 2 What are your views regarding the details to be included in the records of transactions as foreseen in Annex II? For end-users like the CEFIC-IFIEC members the records of the transactions are much too detailed and will lead to a lot of administration. DRAFT Do you agree that a distinction should be made between standardised and nonstandardised contracts? CEFIC-IFIEC supports the proposal to make a distinction between standardized and non-standardized contracts. The administrative and legal burden for nonstandardized contracts will be higher than for standardized contracts. As far as nonstandardized products with end-consumers are concerned it is not very likely that these contracts will be used for market abuse. On the other hand we can imagine that non-standardized contracts in the gas industry or in the power sector are much more flexible and will contain clauses that in case these will be executed its related transactions potentially could have a significant effect on whole sale process Do you agree with the proposal on the unique identifier for market participants? IFIEC agrees that there should be a unique identifier for each market participant. IFIEC recommends creating a process as easy und user friendly as possible Question 3 Do you agree with the proposed way forward to collect orders to trade from organised market places, i.e. energy exchanges and broker platforms? Do you think that the proposed fields in Annex II.1 will be sufficient to capture the specificities of orders, in particular as regards orders for auctions? IFEC like to support to collect data based on the most efficient and cost effective way. Collecting data via organized markets placed could be efficient. However ACER suggests collecting this information on a continuous basis. Continuous could mean real time or once a day or once a week etc. Depending on the frequency the costs could be low or very high. IFIEC expects that these costs will be passed through to the end consumers. If ACER manages to get the information needed at the lowest cost IFIEC supports the proposal. Question 4 Do you agree with the proposed way forward concerning the collection of transactions in non-standardised contracts? Please indicate your view on the proposed records of transactions as foreseen in Annex II.2, in particular on the fields considered mandatory. IFIEC supports the approach. Question 5 2 DRAFT Please indicate your views on the proposed collection of scheduling/nomination information. Should there be a separate Annex II.3 for the collection of scheduling/nomination data through TSOs or third parties delegated by TSOs? IFIEC sees no problem when TSOs or other third parties submit these information to ACER, however our main concernis related to the confidentiality. Question 6 What are your views on the above-mentioned list of contracts according to Article 8(2)(a) of the Regulation (Annex III)? Which further wholesale energy products should be covered? Do you agree that the list of contracts in Annex III should be kept rather general? Do you agree that the Agency should establish and maintain an updated list of wholesale energy contracts admitted to trading on organised market places similar to ESMA’s MiFID database? What are your views on the idea of developing a product taxonomy and make the reporting obligation of standardised contracts dependent from the recording in the Agency’s list of specified wholesale energy contracts? For the European Industrial end users of gas and electricity it is to be expected that costs will rise significantly, when the 600 GWh limit per year will be applied. Unnecessary costs will be the consequence. We are in favour to develop a product taxonomy and make the reporting obligation of standardized contract dependent from the recording in the Agency’s list assuming that is proposal will increase efficiency al lower the costs. ACER recommendation 3 regarding the list of Annex III does not cover contracts in balancing markets. IFIEC strongly recommend adding contracts and trading in the balancing market because this market is very sensible for market abuse Question 7 Which of the three options listed above would you consider being the most appopriate concerning the de minimis threshold for the reporting of wholesale energy transactions? In case you consider a de minimis threshold necessary, do you consider that a threshold of 2 MW as foreseen in Option B is an appropriate threshold for small producers? Please specify your reasons. The overall goal of REMIT is to prevent market abuse, which is totally supported by IFIEC. Furthermore the reporting obligations should be kept to a minimum and not create unnecessary costs or administrative burdens for market participants. With the current proposal, this requirement will be missed, regarding industrial power plants. The European industry has no natural incentive to use these plants for market abuse. The primary goal of industrial power plants is to sustain the production at 3 DRAFT efficient costs. IFIEC therefore asks to exclude industrial power plants from any reporting obligation. Question 8 Are there alternative options that could complement or replace the three listed above? Question 9 Do you agree with the proposed approach of a mandatory reporting of transactions in standardised contracts through RRMs? IFIEC like to support manatory reporting by a Registered Reporting Mechanism (RMM) assuming this would increase efficiency and decrease costs. Again the safeguard of the confidentiality is one of the most important concerns of IFIEC Question 10 Do you believe the Commission through the implementing acts or the Agency when registering RRMs should adopt one single standardised trade and process data format for different classes of data (pre-trade/execution/post-trade data) to facilitate reporting and to increase standardisation in the market? Should this issue be left to the Commission or to the Agency to define? Yes, IFIEC believes that there should be one single standardised trade and process data format for different classes of data. This must also be used on national level. The worst case would be, if the consumers have to implement several new ITsystems. Question 11 Do you agree that market participants should be eligible to become RRMs themselves if they fulfil the relevant organisational requirements? Yes, IFIEC agrees. Question 12 4 DRAFT In your view, should a distinction be made between transactions in standardised and non-standardised contracts and reporting of the latter ones be done directly to the Agency on a monthly basis? IFIEC support this proposal at the condition that , that reporting data from standardised contracts the next work day of non-standardized products on a monthly basis may not lead to high IT investment costs. Question 13 In view of developments in EU financial market legislation, would you agree with the proposed approach for the avoidance of double reporting? Yes, IFIEC supports the proposed approach. The avoidance of double reporting must be a general rule. Especially in interaction with national regulation. Question 14 Do you agree with the proposed approach concerning reporting channels? Yes, IFIEC agrees. Question 15 In your view, how much time would it take to implement the above-mentioned organisational requirements for reporting channels? As soon as possible, but preferable not longer than one year Question 16 Do you agree with this approach of reporting inside and transparency information? From the process perspective IFIEC agrees, but IFIEC still sees room for market abuse which could be used by producers. The detailed answer could be found in an IFIEC response published before which we will attach to this questionnaire. Question 17 Please indicate your views on the proposed way forward on the collection of regulated information. The data should collect as efficient as possible. TSO as data collectors could help this process. 5 DRAFT Question 18 Do you agree with the proposed approach for the reporting of regulated information? Please indicate your view on the proposed mandatory reporting of regulated information through RIS and transparency platforms. Should there remain at least one reporting channel for market participants to report directly to the Agency? Assuming publication via RIS is the most effective and secure way, IFIEC supports this proposal Question 19 The recommendation does not foresee any threshold for the reporting of regulated information. Please indicate whether, and if so why, you consider a reporting threshold for regulated information necessary. IFIEC is not only in favour to introduce a threshold for the reporting data, but also to improve the definition of inside information in general in and relating to the condition that it “would be likely to significantly affect the prices” in particular Moreover IFIEC-CEFIC insists to exclude data from industrial users as long as it is not plausible that these trades will significantly affect the prices or will lead to market abuses. Question 20 What is your view on the proposed timing and form of reporting? IFIEC supports the approach. 6