Under the new REMIT regulation, which came into force on October 7th 2015, energy trading companies and large energy consumers will need to report all standard trades and orders to trade in the European wholesale power and gas markets to ACER, via a RRM (Registered Reporting Mechanism). There are various RRMs available, such as Trayport, EFETNet and RegisTR. “Standard” trades cover those executed on exchanges such as EEX and ICE, and the majority of trades executed electronically through brokers.
Many of the brokers and exchanges support delegated reporting, which allows the venue to report to ACER on the participant’s behalf. Companies can also “self-report” by reporting orders and trades from their own system to ACER via a RRM. We are seeing that most companies are choosing a delegated reporting model for this first phase of REMIT.The second phase of REMIT applies from April 2016, and requires companies participating in the wholesale European energy markets to report “non-standard” trades to ACER via a RRM. These are trades executed off venue, the information for which is normally held in an ETRM. This covers a wide variety of Trades including PPAs, “internal” deals and structured contracts. This second phase is potentially a bigger impact for most companies as they will not be able to delegate reporting to a venue, but report themselves from data held in their ETRMs or other systems.
The REMIT regulation follows on from EMIR financial regulation implemented in February 2014, but is entirely focussed on the energy markets, whereas the EMIR regulation concerns all European financial markets. The EMIR regulatory requirements are changing over time and we expect the REMIT requirements to also change over time. There is also more regulation coming, such as MiFID II in 2017 which will impose a further regulatory burden on market participants. The impact of not meeting these regulatory requirements can be considerable, both financially and commercially. It is important that companies ensure they have the systems and processes in place to ensure they are fully meeting their regulatory obligations and can continue to meet the evolving regulatory requirements. Contigo is committed to providing systems capable of fully meeting its customers regulatory reporting requirements.
Contigo’s enTrader product supports both EMIR and REMIT regulatory reporting requirements through the optional Regulatory Reporting module. This module ensures enTrader can capture all the required Trade and static data such as UTIs, LEI codes and EIC codes and manage the full lifecycle reporting requirements for this data. enTrader supports direct reporting to three EMIR Trade Repositories (DTCC, RegisTR and Unavista) and supports a number of RRMs including Trayport Complete. enTrader automatically determines the reporting obligation of each trade and manages its reporting status. All interaction with the TRs and RRMs is recorded within enTrader and can be audited. Reporting can be implemented on a scheduled or automatic basis and will alert on any issues.