REMIT: Market briefing

Correspondence and other
Publication date
Industry sector
Generation and Wholesale Market

Related information

Introduction

Since 2013 Ofgem has been monitoring for and investigating potential breaches of the Regulation on Energy Market Integrity and Transparency (REMIT). REMIT prohibits insider trading and market manipulation, bringing regulation of the wholesale power and gas markets in line with equivalent financial markets. Our REMIT work supports effective competition and promotes trust and confidence in the wholesale markets.

This publication provides an update on our activities under REMIT, including high level overviews of our case activity and discussions of behaviour considered under REMIT. The purpose of this document is to provide greater transparency of our REMIT activities. A review of enforcement action against breaches of sectoral and competition regulation can be found in Ofgem’s annual enforcement overview.

This briefing is prepared and published by the Market Intelligence and Oversight (MIaO) team. The team is responsible for monitoring for and investigating REMIT breaches in GB, from identification of issues through to formal investigation. Formal investigations of REMIT breaches are carried out in coordination with Ofgem’s Conduct & Enforcement team. The Enforcement Oversight Board (EOB) oversees and makes decision on all of Ofgem’s investigations, including REMIT. For more details of the process please see our Guidelines.

The MIaO team is also responsible for wholesale market monitoring, the Transmission Constraint Licence Condition and the Secure and Promote Licence Condition. The team monitors the markets for compliance with regulations, codes and licences, addressing apparent breaches ourselves or engaging with the most appropriate teams to take matters forward.

Key points

  • Ofgem has been actively monitoring and investigating potential breaches of REMIT since 2013. In that time we have dealt with 795 alerts, reviewed 197 cases and opened more than 19 investigations to ensure that poor conduct in the wholesale market is identified and addressed.
  • We have imposed our first REMIT penalty for a breach of Article 5 (market manipulation).
  • We have engaged with a number of companies in order to address issues and improve compliance processes. Topics include inside information disclosure, potential market manipulation and effective controls.
  • We have been actively clarifying REMIT issues through our open letters, and have been working with Agency for Cooperation on Energy Regulators (ACER) and other National Regulatory Authorities (NRAs) to develop the REMIT framework internationally. This has included publishing Q&As and guidance on wash trading, spoofing and layering, and on data quality.
  • To date, we have registered over 1300 market participants in Centralised European Register of Energy Market Participants, a database recording all parties trading wholesale energy products.
  • We are also regularly engaging with Persons Professionally Arranging Transactions (PPATs) through our regular forums and bilateral meetings. This ensures appropriate compliance with Suspicious Transaction Reporting (STR) requirements.

All the information in this report is correct as of 5 September 2019.