Since 28 December 2011, CRE's task of monitoring wholesale energy markets has been carried out within the framework of REMIT, the European Regulation on the integrity and transparency of wholesale energy markets (EU Regulation (EU) N°1227/2011 of 25 October 2011), directly applicable in all Member States.
This regulation organises a supervisory framework adapted to the electricity and gas markets, in relation to the physical characteristics of supply and demand.
It is articulated with financial regulation and provides that the supervision of wholesale energy markets also takes into account interactions with the carbon market, although emission allowances are not qualified as wholesale energy products in the sense of REMIT.
The main provisions of REMIT
The main provisions of REMIT are as follows:
- the prohibition of insider trading (Article 3);
- the prohibition of market manipulation (Article 5);
- the obligation for market participants to publish the inside information they hold (Article 4).
The Agency for the Cooperation of Energy Regulators (ACER) publishes non-binding guidance on the application of REMIT for National Regulatory Authorities (NRAs). These guidelines specify in particular the concepts of wholesale energy products, wholesale energy markets and market players as well as the modalities of application of the obligation to publish inside information.
The fourth and latest version of ACER's guidelines dated 17 June 2016 details in particular the implementation of the obligations incumbent on Persons Professionally Arranging Transactions (PPAT).
Pursuant to Article L. 131-2 of the Energy Code, CRE guarantees compliance with Articles 3, 4, 5, 8, 9 and 15 of the regulations. The legal corpus in force allows CRE, within the framework of REMIT, to :
- monitor the wholesale markets ;
- conduct investigations in the event of suspicion of market abuse.
The CoRDiS is competent to sanction breaches of the regulation.
The scope of REMIT
The REMIT perimeter
The REMIT Regulation applies to market participants, i.e. any natural or legal person trading on wholesale energy markets. The wholesale energy products concerned are contracts for the delivery of electricity or natural gas within the European Union and contracts for the transmission of electricity or natural gas within the Union (and their derivatives), whether they are concluded on the spot or futures market.
REMIT does not apply to supply and distribution contracts intended for final customers, with the exception of final consumers whose consumption exceeds 600 GWh per year.
Articles 3 and 5 of the Regulation on the prohibition of insider dealing and market manipulation do not apply to wholesale energy products which are also financial instruments subject to the Market Abuse Regulation (MAR). However, the latter remain concerned by the obligation to publish inside information pursuant to Article 4 of REMIT.
CRE supervision
CRE monitors the orders and transactions of market players (producers, traders, energy suppliers, etc.) likely to affect the French market, regardless of the country where the counterparties are established and their trading methods (bilateral transactions, whether intermediated or not, or transactions on organised markets).
CRE's supervision covers :
- transactions concluded by a producer, trader or supplier on the wholesale energy market;
- the offers of these players on the wholesale energy market;
- the technical and economic constraints weighing on these players and influencing their offers and transactions.
CRE and the CO2 and capacity guarantee markets
In accordance with Article L. 131-3 of the Energy Code, CRE has the power to monitor transactions carried out on the carbon market by players active on the French electricity and gas market.
This competence authorises it to question, if necessary, the players active on the energy market in the event of unusual movements in prices or volumes on the carbon market.
It is in line with the new provisions of the financial regulations in force since January 2018, which qualify CO2 allowances as a financial instrument. CRE continues to monitor the carbon market in the context of monitoring the fundamentals of the energy market. This monitoring may give rise to specific requests for information from players active on the French energy markets. These requests may in particular be made in the event of unusual events involving the carbon market and the electricity markets in a cross-checking manner. The detection of these cases may come from the monitoring carried out directly by CRE, ACER or financial regulators.
In accordance with Article L. 131-2 of the Energy Code, CRE also guarantees, for the capacity obligation mechanism, compliance with the prohibitions on market abuse (market manipulation and insider trading), as well as the obligation to publish inside information, as provided for in Articles 3, 4 and 5 of REMIT.