ACM ensures electricity producers will be more alert to the publication of inside knowledge

The Authority for Consumers and Markets (ACM), the Dutch energy regulator, published a market alert reinforcing the need to power generators for the timely publication of inside information. The ACM cited a recent market study which indicated that while disclosure practices had improved between 2021 and 2022, there were still areas requiring further work.

The ACM quotes a study conducted into inside information disclosure practices during 2021 and the first half of 2022 on the Inside Information Platforms (IPPs) facilitated by EEX and Nord Pool which concluded that 6.4% of publications in the Netherlands were not made in a timely manner. The ACM has since discussed this statistic with generators in the Dutch market, and have also provided additional information and guidance on their website (click here, in Dutch). Some of the issues addressed include:

• The need to publish inside information even if an outage is caused by restrictions in transportation capacity driven by the system operator.
• The difficulty in providing a production capacity threshold for the non-availability of production above which an alert must be published. Despite these difficulties, the ACM expects that the non-availability of production units of 100 MW or more must always be published and that this lower limit will be reviewed regularly and notified to the market if changed.
• ACM notes that the late publication of inside information is often caused by IT problems and in some cases due to internal procedures not being adequately followed due to lack of knowledge amongst staff. ACM is clear that such failures are no excuse for failing to publish inside information in a timely manner and that processes and systems must be regularly reviewed and appropriate training provided to staff.
• ACM note that only by separating the communication processes between producer and trader can a firm prevent inadvertent insider trading, and that this is most effectively done through clear separation of functions and physical separation between traders and dispatchers noting that not every market participant has properly implemented this. ACM explicitly stated that they ACM will be checking for this in future.
  
  

RegTrail Insight

This mini-thematic review by ACM contains useful guidance in some areas. In particular, it is rare for a National Regulatory Authority (NRA) to make a firm public statement on a materiality threshold for the publication of inside information under REMIT.

While the universal validity of the 100MW threshold is questionable, the clarity provided by this guidance will nonetheless be welcomed be power producers in the Netherlands. Generators with trading operations and internal dispatch desks operating in this market should also pay attention to the expectation of physical separation between these activities, a reasonably well established practice amongst many European market participants.