REMIT Reporting Services and Solutions - July 2015 updated March 2016
5 Reporting of orders and trades arising on Organised Market Places
This next section of the report will focus on the requirements of the first reporting phase, which commenced on the
7th October 2015. It will begin by looking at the concept of “delegated reporting” under REMIT.
5.1
“Delegated reporting” under REMIT
The concept of delegated reporting is one where a market participant instructs another party to report for them. In
general for bilateral trades, two types of delegation are commonly practiced:
-
“Counterparty delegation” – where the one of the two parties to a trade reports on behalf of the other (which
can only occur under a “two sided” reporting regime)
“Third party delegation” – where an entity that is not party to the trade reports. The third party may be an OMP,
an RRM or simply another party offering a service. In some cases the third party may be another internal entity
within an organisation.
Under EMIR it is not possible to delegate responsibility for reporting, even if it is allowed operationally. The practical
upshot of this is that if the delegate fails to report, it is the original market participant that has broken the rules. The
implication of this is that market participants need to run frequent checks to ensure that those to whom they have
delegated have met their obligation.
REMIT takes a different approach to this: According to the REMIT Implementing Act Article 11(2), if one party reports
on behalf of another, it becomes responsible for any failure to pass on the appropriate data, so long as the third
party had the correct data to begin with. However, the Act does state that those delegating:
“shall nevertheless take reasonable steps to verify the completeness, accuracy and timeliness of the data which they
submit through third parties.”
In practice therefore, reconciliation is required under REMIT as well as EMIR, although perhaps not at the same level.
The 14th REMIT Questions and Answers document, issued on 16th February 2016, strengthened the concept of
delegated responsibility by suggesting that when reporting using the data reporting agreement provided by the OMP
(or their preferred RRM), the above responsibility is relieved.
5.2 What is an OMP under REMIT?
An “Organised Market Place” under REMIT is defined by the REMIT Implementing Act (Article 2(4)) as:
(a) a multilateral system, which brings together or facilitates the bringing together of multiple third party buying and
selling interests in wholesale energy products in a way that results in a contract,
(b) any other system or facility in which multiple third-party buying and selling interests in wholesale energy
products are able to interact in a way that results in a contract.
These include electricity and gas exchanges, brokers and other persons professionally arranging transactions, and
trading venues as defined in Article 4 of Directive 2014/65/EU [MiFID II] of the European Parliament and of the
Council
In practice, this means an exchange or broker platform, as well as some other platforms such as the Irish “SEM”
market platform. ACER publishes a constantly updated list of the officially recognised OMPs on their web site, which
at the time of writing numbers over 65 platforms.
Exchanges, and broker platforms work differently, and the implications of trading on each will differ when
implementing the first phase of REMIT reporting, as we shall see in the following sections.
Copyright 2016 – ETR Advisory Ltd and Commodity Technology Advisory LLC
20