REMIT Reporting Services and Solutions - July 2015 updated March 2016
on that market place”. Those trades executed on a venue are clearly standard contracts. However the definition also
provides for off venue trades that “look like” trades executed on a venue.
It is clearly not always easy to determine if a specific trade is a look alike. However, the “standard/non-standard”
status” does not need to be reported, it simply affects the reporting deadline. This may find it easier to report all
“candidate” trade within one day rather than to attempt to determine status.
6.1.2
“Simple” trades
The Implementing Act states that any trade with a fixed volume and price should be reported using table 1. The
format permits one counterparty, up to one index, no volume optionality and simple price optionality. Any trade
that has fixed volume and price, and can be reported using table 1 thus should be.
There is an open question (at the time of writing) as to how to report off venue trades with one index, which can be
reported using format 1, but do not have a fixed price. At the time of writing the market was divided by this issue
and no clear answer had been given.
6.1.3
“Complex” trades
Any trade or contract that cannot be “fitted” into format 1, needs to be reported in format 2. While format 2 has less
fields than format 1, it permits far more flexibility in terms of repeating fields and groups. It is possible to specify
multiple:
-
Counterparties
Indices
Volume Optionality bands
Price Optionality
Delivery points
Commodities (i.e. gas AND power)
This format can be used for almost any occurrence. In terms of pricing, it is necessary to provide a formula or
narrative based price of up to 1,000 characters. It is possible to use summaries, and as this field is not “matched”
market participants have some flexibility as to what to put in this field.
It is import to get the indices, and volume optionality fields correct in order to permit the regulators to run effective
surveillance on the records.
6.1.4
The “Framework/execution” construct
The most “prominent” feature of phase 2 reporting is the description of long-term contracts and child executions.
Using this “construct”, a long-term contact is described using format 2. This is reported once, unless the contract
itself is modified, in which case it is resent using a “lifecycle” event. This would only apply to “real” modifications,
such as a signed amendment.
Actual volumes and prices are reported using a “child” execution, linked to the parent by setting the link ID field in
the format 1 record, to the UTI (ContractID) of the parent framework.
The documentation provided by ACER (TRUM Annex II) guides that executions should be sent to mirror the billing
cycle relating to the framework, so that in a usual situation, one execution per month should be sent. However it
does provide for sending executions more often.
While there is no clear guidance on the topic, the market convention at the time of writing is that volumes over a
month should be summed, and a weighted average price calculated, giving the volume and price to report in the
execution. Execution are to have UTIs, but these are one sided and will not be matched.
Copyright 2016 – ETR Advisory Ltd and Commodity Technology Advisory LLC
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