Changes from report parliamentary committee draft to plenary report

The energy crisis, considerably worsened by Russia’s invasion of Ukraine, led the European Commission to propose, on 14 March 2023, a reform of the Electricity Market Design. As part of this reform, several key pieces of EU legislation are being revised, notably the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).

This Regulation, which entered into force in 2011, aims to prevent and fight malpractices such as insider trading and market manipulation, thus contributing to ensure the transparency, competitiveness and stability of the EU Energy markets. In the present revision proposal, the Commission envisions a reinforcement of the Agency for the Cooperation of Energy Regulators (ACER) and national regulators’ ability to monitor energy market integrity and transparency. The revision also seeks to enable access to better data, as a part of the effort to strengthen the capabilities of these regulators.

Whilst welcoming the European Commission´s initiative, and fully supporting its main principles and lines of action, the Rapporteur considers that further efforts are necessary in order to ensure that the announced goals are achieved. Notably, a reinforcement of ACER's role in investigations of potential market abuse cases of cross-border nature, and a clearer set of rules for all market participants, for their own protection and to prevent the exploitation of legal loopholes and contradictions.

Therefore, amendments are introduced with three main principles as guidelines: Legal Coherence and Transparency, a Strengthened European Dimension and a Reinforced Market. To each of these principles corresponds a specific set of actions. Legal Coherence and Transparency shall be enabled by more clarity in the Regulation and a better alignment with other pieces of EU legislation. A Strengthened European Dimension is pursued through the reinforced scope of ACER’s actions and its cooperation with national regulators. Finally, measures aimed at removing red tape, unnecessary barriers and redundant reporting contribute to a Reinforced Market.

Examples of specific actions/amendments include:

Legal coherence and transparency

- Better aligning the definitions to the specificities of the energy markets to avoid confusion, overlaps and excessive administrative burden, providing more clarity and setting the ground for an effective implementation of the rules (i.e. definition of ‘Organised Market Place’, ‘Order Books’, and ‘Inside Information’);

- Inclusion of all relevant actors in the definition of ‘market participant’, while avoiding putting excessive burden on smaller players in the case of persons professionally arranging transactions, with little benefit;

- Better framing the roles of Inside Information Platforms and Registered Reporting Mechanisms, but streamlining language and procedures, while giving market participants more time to adapt to the new rules;

- Adequate integration of the LNG-related articles, imported from the Council Regulation on Enhanced Solidarity Through Better Coordination of Gas Purchases, Reliable Price Benchmarks and Exchanges of Gas Across Borders, into REMIT, in order to provide more clarity and avoid repetition of tasks and reporting exercises;

Strengthened European Dimension

- Reinforcing ACER’s powers, namely by modifying the criteria for identifying cross-border cases that can be investigated by ACER and enhancing its investigative capabilities;

- Enhancing the exchange of information between energy and financial authorities, making sure that monitoring is effective and does not overlap;

- Keeping a balance between ACER’s responsibilities and National Regulatory Authorities’ roles, especially when the latter can perform the concerned activities; where they cannot, ACER should play a part. The Rapporteur decided to respect the NRA’s primary role in the enforcement phase;

- Supporting the European Commission’s proposal to reinforce ACER’s task to produce guidelines and recommendations, while preventing the superfluous administrative burden that these might entail for market participants;

Reinforced market

- Avoiding excessive administrative work and reduce red tape for market participants;

- Making sure adequate access to the markets is granted also for third country players;

- Making sure that investments are safeguarded, by ensuring that information regarding the investments process shall be disclosed only when it is certain that the concerned data might influence the market.

On a final note, the Rapporteur would like to remind that the present revision was put forward by the European Commission with a considerable degree of urgency, and that, for this reason, its impact should be monitored with particular care. Therefore, an amendment was introduced calling on the European Commission to conduct an assessment of the Regulation, no later than by June 2027, paying special attention to impacts on market behaviour, market participants, liquidity, reporting requirements and the level of administrative burden for market participants.