Dutch Energy Regulator Reprimands Company for Market Abuse
This week ACM, the Dutch energy market regulator, announced (click here) a „soft“ REMIT enforcement action against an unnamed “international company” for the alleged manipulation of the TTF gas market.
What is it about?
- Scant details of the case are provided by ACM. It can be gleaned from the announcement that the unnamed company allegedly engaged in some form of “marking the close” involving the TTF gas market. As the largest gas market in Europe and the fact that TTF prices are used as a reference for many contracts, ACM stresses the importance of the integrity of this markets;
- The announcement does not detail the extent of the activity, the date(s) it occurred or the venue(s) where it took place. They do reference the TTF Day Ahead market and the TTF Heren Day Ahead index which, according to the announcement, is determined every day at 17:30. The short announcement provides a brief description and infographic on the ACM’s interpretation of marking the close – those wishing to understand this abusive behaviour in this context are advised to consult the announcement directly;
- Despite stern words from the ACM, the firm, purportedly a major TTF trader, walked away with only a reprimand. The firm was also not named by ACM, saving them the reputational harm and public scrutiny that this type of announcement might otherwise garner. Such benevolence is not uncommon for the ACM who have previously opted for collaboration over hard enforcement. The ACM does however promise to “keep a close watch on the company” moving forward….
This is the second case of marking close involving European gas markets in recent months. In September 2024 this case was announced by the CNMC, the Spanish regulator, involving day ahead contracts in the local Mibgas market.
The ACM’s announcement also included (click here) a short guidance note (in Dutch) on “Indicators of ACM’s regulatory activities under REMIT” which contains some useful information about the case and more generally about REMIT compliance. The guidance note is summarised below:
- Regarding the TTF marking the close case (per above), the note states that ACM had received “several signals about this type of behaviour” – implying the potential involvement of whistleblowers (although not confirmed);
- They also note their concern over other types of prohibited trading behaviour such as layering/spoofing and off-market price orders where a market participant is misrepresenting the true state of supply and demand through “non-integrated bidding” in order to subsequently profit from it;
- ACM notes, somewhat ominously, that the trend of improved compliance with inside information disclosure by generators “appears to have stalled” in recent months and that the ACM continues to closely monitor compliance in this area with the promise of holding producers accountable;
- They explicitly note that the above warning does not apply exclusively to electricity producers, but also to those with gas and LNG assets including storage, production and transportation. They stress that these parties must also publish UMMs;
- On an unrelated topic, the ACM also notes that the trend of an increasing proportion of market participants registered with the ACM coming from non-EU countries continues with almost half of the 59 new market participants registered since July 2024 being non-Dutch and coming from outside the EU. More than a quarter (27%) of registered market participants are not based in the Netherlands.
It might be reasonable to speculate that the last point above could be partly explained by the ACM’s benevolent, light touch approach to enforcement.
