Changes from plenary report to adopted text

Removed(17) Delegation of tasks and responsibilities can be an effective instrument to reduce duplication of tasks, foster cooperation and reduce the burden imposed on market participants. Therefore a clear legal basis should be provided for such delegation. Where this does not entail an excessive administrative burden on market participants, national regulatory authorities should be able to delegate tasks and responsibilities to another national regulatory authority or to the Agency, with the delegates’ prior approval. Introducing specific conditions and limiting the scope for the delegation to what is necessary for the effective supervision of cross-border market participants or groups should be possible. Delegations should be governed by the principle of allocating competence to an authority which is best placed to take action on the subject matter.

Removed(17a) To enhance the effectiveness of national regulatory authorities and restore public confidence in institutions, the rules on the performance of the duties of national regulatory authorities and the Agency have to ensure that conflicts of interest are avoided as far as possible, in particular in connection with the performance of certain duties.

Removed(18) A uniform and stronger framework to prevent market manipulation and other breaches of Regulation (EU) No 1227/2011 in the Member States is necessary. Penalties for breaches of that Regulation should be proportionate, effective and dissuasive and reflect the type of the breaches, taking into account the ne bis in idem principle. At the same time, Member States are able, inter alia, to provide for effective, proportionate and dissuasive criminal penalties, considering that they are an effective tool in the financial sector. Administrative penalties, penalty payments and supervisory measures are complementary parts of an effective enforcement regime. A harmonised supervision of the wholesale energy market requires a consistent approach among national regulatory authorities, which should be provided with the appropriate financial, human and technical resources in order to adequately fulfil their tasks.

Removed(19) To date, the supervision and enforcement of activities under Regulation (EU) No 1227/2011 have been the responsibility of the Member States. Market abuse behaviours are increasingly cross-border in nature, often affecting several Member States. Enforcement action against cross-border market abuses can present jurisdictional challenges relating to the identification of the national regulatory authority that would be best placed to pursue the investigation in question.

Removed(20) Market abuse cases involving multiple cross-border elements and market participants established outside the Union are also particularly challenging from an enforcement perspective. The current supervisory set-up is not appropriate for the desired level of market integration. The absence of a mechanism to ensure the best possible supervisory decisions for cross-border cases, where joint action by national regulatory authorities and the Agency currently requires complicated arrangements and where there is a patchwork of supervisory regimes must be addressed. There is ▌a need to set up an efficient and effective supervisory and investigatory regime for that type of market abuse cases, which cannot, due to its Union wide features, be addressed by Member State action alone, in particular where the national regulatory authorities are not already taking action.

Removed(21) The investigation of breaches of this Regulation with a cross-border dimension should be carried out through a uniform process at Union level. Complexity of cross-border cases and the need to ensure sufficient resources for such cases requires involvement of the Agency, in particular in more integrated energy market. Since the entry into force of Regulation (EU) No 1227/2011, the Agency has gained significant experience in monitoring and collecting relevant data on the wholesale energy markets in the Union to ensure their integrity and transparency. Building on this experience, the Agency should be empowered to carry out investigations to fight against the breaches of the provisions of Regulation (EU) No 1227/2011, including by appointing an independent investigating officer within the Agency with powers to conduct on-site inspections, request information and conduct interviews. The Agency should carry out such investigations in cooperation with the national regulatory authorities with the purpose of supporting and complementing their enforcement activities. Equally, in the context of an investigation by the Agency, where necessary, relevant national regulatory authorities should cooperate amongst each other in assisting the Agency.

Removed(21a) To fulfil the new obligations assigned to it, in particular those relating to enhanced investigatory and sanctioning powers in cross-border cases, the Agency should have adequate staff and the ability to hire additional personnel, if necessary.

Removed(22) The Agency should be empowered to carry out investigations by conducting on-site inspections and by issuing requests for information to the persons under investigations, in particular where the suspected breaches of Regulation (EU) No 1227/2011 have a clear cross-border dimension. In undertaking the on-site inspections and in issuing requests for information to the persons under investigations, the Agency should closely and actively cooperate with the relevant national regulatory authorities, which in turn should provide the Agency with full assistance, including where a person refuses to be subject to the inspection or to provide the requested information. It is important that the procedural guarantees and fundamental rights of the persons ▌subject to the Agency’s investigations are fully respected. The confidentiality of the information submitted by the persons subject to the investigation should be safeguarded exchanged in accordance with applicable Union data protection rules.

Removed(23) Since the objectives of this Regulation cannot be sufficiently achieved by the Member States, but can be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve that objective,

RemovedHAS ADOPTED THIS REGULATION:

RemovedAmendments to Regulation (EU) No 1227/2011

RemovedRegulation (EU) No 1227/2011 is amended as follows:

Removed(1) Article 1 is amended as follows:

Removed(a) Second paragraph is amended as follows:

Removed“2. This Regulation applies to trading in wholesale energy products. This Regulation is without prejudice to the application of Regulations (EU) 596/2014, (EU) 600/2014 and ▌ (EU) 648/2012 and Directive (EU) 2014/65 as regards activities involving financial instruments as defined in Article 4(1), point (15), of Directive (EU) 2014/65, as well as to the application of European competition law to the practices covered by this Regulation.”;

Removed(b) In Article 1(3) the following second subparagraph is added:

Removed“The Agency, national regulatory authorities, ESMA and competent financial authorities of the Member States shall ▌exchange relevant information and data on a regular, at least quarterly, basis regarding potential breaches of Regulation (EU) No 596/2014 ▌involving wholesale energy products covered by this Regulation.”;

Removed(ba) paragraph 4 is replaced by the following:

Removed“4. The Agency's Administrative Board shall ensure that the Agency carries out the tasks assigned to it under this Regulation in accordance with this Regulation and Regulation (EC) No 713/2009 and that the Agency has adequate staff and the ability to hire additional personnel, if necessary, to fulfil the new obligations assigned to it.”;

Removed(2) Article 2 is amended as follows:

Removed(a) in point (1), the second subparagraph, the following point ▌ is inserted:

Removed“(ca) information which is conveyed by a market participant, or by other persons acting on the market participant’s behalf, to a service provider trading on the market participant’s behalf and relating to the market participant’s pending orders in wholesale energy products, which is of a precise nature and relates directly or indirectly ▌ to one or more wholesale energy products”;

Removed(b) the third subparagraph is replaced by the following:

Removed“Information shall be deemed to be of a precise nature if it indicates a set of circumstances which exists or may reasonably be expected to come into existence, or an event which has occurred or may reasonably be expected to occur, and if it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of wholesale energy products. Information may be deemed to be of a precise nature if it relates to a protracted process that is intended to bring about, or that results in, particular circumstances or a particular event, including future circumstances or future events, and also if it relates to the intermediate steps of that process which are connected with bringing about or resulting in those future circumstances or that future event.

RemovedAn intermediate step in a protracted process shall be deemed to be inside information if, by itself, it satisfies the criteria of inside information as referred to in this point.

RemovedFor the purposes of this point, information which, if it were made public, would be likely to significantly affect the prices of the wholesale energy products means information that a reasonable market participant would be likely to use as part of the basis of his or her ▌decision(s) to enter into a transaction relating to, or to issue an order to trade in, a wholesale energy product.

RemovedFor the purposes of this point, information that has a possible effect on the demand, supply or prices of a wholesale energy product, or on the expectations of the demand, supply or prices of a wholesale energy product, shall be considered to be directly or indirectly related to the wholesale energy product.”;

Removed(c) paragraph (2), point (a) is replaced by the following:

Removed(2) ‘market manipulation’ means:

Removed(a) entering into any transaction, or issuing, modifying or withdrawing any order to trade or engaging in any other behaviour relating to wholesale energy products or relevant infrastructure which:

Removed(i) gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of wholesale energy products;

Removed(ii) secures, or is likely to secure , by a person, or persons acting in collaboration, the price of one or several wholesale energy products at an artificial level, unless the person who entered into the transaction or issued the order to trade establishes that his reasons for doing so are legitimate and that that transaction or order to trade conforms to accepted market practices on the wholesale energy market concerned; or

Removed(iii) employs a fictitious device or any other form of deception or contrivance which gives, or is likely to give, false or misleading signals regarding the supply of, demand for, or price of wholesale energy products;

Removedor

Removed(d) in paragraph (2), the following point (c) is added and preceded by the word ‘or’ at the end of point (b):

Removed“(c) transmitting false or misleading information or providing false or misleading input in relation to a benchmark where the person who made the transmission or provided the input knew or ought to have known that it was false or misleading, or engaging in any other behaviour which leads to the manipulation of the calculation of a benchmark.”;

Removed(e) at the end of paragraph (2) the following subparagraph is added:

Removed“Market manipulation may designate the conduct of a legal person, or, in accordance with ▌ Union or national law, of a natural person who participates in the decision to carry out activities for the account of the legal person concerned.”;

Removed(f) in paragraph (4), point (a) is replaced by the following:

Removed“(4) ‘wholesale energy products’ means the following contracts and derivatives, irrespective of where and how they are traded:

Removed(a) contracts for the supply of electricity or natural gas, including LNG, where delivery is in the Union or contracts for the supply of electricity or natural gas, which may result in delivery in the Union, as a result of single day-ahead and intraday coupling;

Removed(aa) contracts and derivatives relating to the electricity and natural gas storage in the Union;”;

Removed(fa) point (4) (b) is replaced by the following:

Removed“(b) derivatives relating to electricity or natural gas produced, traded or delivered in the Union, or derivatives relating to electricity or natural gas which may result in delivery in the Union, as a result of single day-ahead and intraday coupling;”

Removed(g) paragraph (7) is replaced by the following:

Removed“(7) ‘market participant’ means any person, including transmission system operators, distribution system operators, storage system operators and LNG system operators, who enters into transactions, including the placing of orders to trade, in one or more wholesale energy markets; ”;

Removed(h) the following new paragraph (8a) is inserted:

Removed“(8a) 'person professionally arranging or executing transactions' means a person professionally engaged in the reception and transmission of orders for, or in the execution of transactions in, wholesale energy products;”;

Removed(i) the following new paragraph (10a) is added:

Removed“(10a) 'the Agency’ or ‘ACER’ means the European Union Agency for the Cooperation of Energy Regulators;”;

Removed(j) the following points are inserted:

Removed“(16) ‘registered reporting mechanism’ or ‘RRM’ means a person registered under this Regulation to report or to provide the service of reporting details of transactions, including orders to trade, and fundamental data as defined in Article 2, second subparagraph, point (1), of Implementing Regulation (EU) No 1348/2014, to the Agency on its own behalf or on behalf of market participants;

Removed(17) ‘inside information platform’ or ‘IIP’ means a person registered under this Regulation to provide the service of operating a platform for the disclosure of inside information and for the reporting of disclosed inside information to the Agency on behalf of market participants.

Removed(18) ‘algorithmic trading’ means trading, including high-frequency trading, in wholesale energy products where a computer algorithm automatically determines individual parameters of orders to trade such as whether to initiate the order, the timing, price or quantity of the order or how to manage the order after its submission, with limited human intervention or no such intervention at all, not including any system that is only used for the purpose of routing orders to one or more organised market places or for the processing of orders involving no determination of any trading parameters or for the confirmation of orders or the post-trade processing of executed transactions;

Removed(19) ‘direct electronic access’ means an arrangement whereby a member, participant or client of an organised market place allows another person to use its trading code so the person may electronically transmit orders to trade relating to a wholesale energy product directly to the organised market place, including arrangements which involve the use by a person of the infrastructure of the member, participant or client, or any connecting system provided by the member, participant, or client, to transmit the orders to trade (direct market access) and arrangements whereby such an infrastructure is not used by a person (sponsored access);

Removed(20) ‘organised market place’ or ‘OMP’▌ means an energy exchange, an energy broker, an energy capacity platform or any other system or facility in which multiple third-party buying or selling interests in wholesale energy products interact in a way that may result in a transaction;.

Removed(20a) ‘order book’ means all details of wholesale energy products executed at organised market places including matched and unmatched orders as well as system-generated orders and life cycle events;

Removed(21) ‘LNG trading’ means entering into any transaction, including orders to trade in an organised market place or taking any other action relating to the purchase or sale of LNG:

Removed(a) that specifies physical delivery in the Union;

Removed(b) that results in delivery in the Union; or