Towards the end of 2011, the Regulation on Wholesale Energy Market Integrity and Transparency, popularly known as REMIT was implemented by the European Parliament. The purpose of REMIT is simple; it is intended to establish a fair energy wholesale market by curbing market manipulation (both explicit and attempted), insider trading and market abuse. REMIT was also enforced to ensure the monitoring of wholesale energy markets and to enforce breaches and sanctions where abuse has been detected. It is, therefore, the first of its kind; a European Union trade surveillance system.
The European Union is linked through trade ties in such a way that manipulating energy prices in one country or region is guaranteed to affect other EU member states. While some countries, before REMIT, had been successful in regulating energy prices within their borders, many barely even made modest attempts. The benefits of regulating the energy trading market are numerous. The importance of transparency in such a market cannot be understated as transparency ensures among other things that prices are not distorted and that consumers are paying the right price for energy products like gas and electricity.
REMIT defines market participants as persons who transact, trade or place orders to trade in a wholesale market, regardless of the location of such persons. Therefore, market participants refers to persons both from EU and non EU countries. Energy trading companies, producers of natural gas and electricity, shippers of natural gas, wholesale and final customers, transmission system operators among others have all been deemed market participants. They are, therefore, required to disclose certain information to REMIT. For example, they ought to provide the agency with a record of wholesale energy market transactions, together with orders to trade. This can be done either through the market participant itself or through a person of authority. Market participants also need to register with National Regulatory Authorities if they are about to enter into transactions in which REMIT requires to be reported. This is outlined in article 8(1) of REMIT.
REMIT requirements also call for market participants to disclose publicly inside information which they possess pertaining to businesses or facilities owned or controlled by the participant or related undertakings and operational matters being undertaken by the participant. Inside information is to be made public in a timely and effective manner, for example, through transparency platforms such as those operated by TSOs. More information on the trade surveillance systems requirements for market participants or questions on the same can be channelled through E-control.