This new EU regulation on wholesale energy market integrity and transparency came into force on December 28 and imposes requirements on wholesalers, not just to avoid manipulating markets themselves, but to blow the whistle on other offenders. In detailed guidance released just before Christmas, the European Agency for the Cooperation of Energy Regulators (ACER) told national regulators and utilities how to detect such misdemeanours.
This would involve, it said, significant trading by major market participants before the announcement of significant information; and sudden and unusual changes in orders and prices before such an announcement. Other signs to look out for include significant “position reversals in a short period”, and when trading orders happen “at or around a specific time when reference prices, settlement prices and valuations are calculated.” ACER added that utilities and energy traders should report suspicions of wrongdoing, even if they cannot prove them.
“Where not all the relevant information is available at the time of notification, the notification shall include at least the reasons why the notifying persons suspect that the transaction might constitute insider dealing or market manipulation,” noted the guidance.
ACER will soon publish two electronic templates for alerting its officials and national regulators to insider trades and market manipulation.
By Keith Nuthall