This week saw two separate joint industry association letters published making their final cases regarding the REMIT 2 legislation which is entering into the final stages of the trilogue negotiations.
The first (click here) is from EFET, Eurelectric, FIA, AFME, CMC Europe, Eurogas, Europex, FESE, , FIA EPTA, IOGP and ISDA, and recommends implementation timelines for the new REMIT 2 rules. The current proposed implementation timeline specified under Article 3 is six months, a very short period under any circumstance. The letter proposes at least a 12 month general implementation period with a few exceptions for more complex rules. Given the varied complexity and likely required implementation effort for the various rules, the joint industry group breaks these down as follows:
- Art. 2 (4) Definitions - 6 months after Delegated Acts/Implementing Acts (DA/IA) enter into force;
- Art. 4a IIP provisions - 12 months after related DA enters into force plus 12 months after ACER has issued a new UMM XSD specification;
- Art. 5a Algorithmic trading – 18 months;
- Art. 6 Definitions of inside information and market manipulation - 6 months after publication of the relevant ACER guidance;
- Art. 7c LNG market data – 6 months after DA/IA enters into force;
- Art. 8 (1a) OMP order book Data - 18 months after entry into force of the related IA;
- Art. 9 (1) Requirements for third country firms – 18 months;
- Art. 9a Authorisation and supervision of RRMs - 12 months after related DA enters into force;
- Art. 15 PPAT obligations - 12 months after related DA enters into force;
- Art. 15 (b) Obligation of suspicious order and transactions reporting - 18 months.
The letter highlights that there is likely to be an acute shortage of the specialist IT skills available in the market needed to properly implement many of the rules/rule changes.
The second letter (click here) from the Joint Energy Associations Group (JEAG) comprised of BDEW, EFET, Eurelectric, Eurogas, IOGP Europe, VKU and the CMCE addresses the concern around the centralisation of Inside Information Platforms (IIPs) under REMIT 2 and potential scenarios where failures in the IIP may prevent firms from trading during an outage. Currently there are no formal provisions within the proposed Level 1 text that ensures that, by exception, disclosures of inside information may be temporarily made through alternative channels where the IIP is disabled due to, for example, cyberattacks, power outages or other IT issues.
The letter notes that while this exception is provided for in Recital 11 of the EU Parliament’s text, more legal certainty for market participants is needed. The letter suggests firms’ own back-up solutions such as company websites, or alternative centralised channels to “guarantee an effective EU-wide disclosure to the market” although further recommendations are not made.
