EFET and London Brokers take the lead on REMIT reportingDecember 4, 2014
The European Federation of Energy Traders (EFET), through its industry owned company EFETnet and the major London energy brokers have come together to take the lead on the implementation of new European Union regulations that require energy trades, contracts and some orders to be reported to the Agency for the Cooperation of Energy Regulators (ACER).
These new rules – known as the REMIT Implementing Acts (IA) – are designed to ensure that regulators have a single resource for monitoring and recording activities in the energy trading markets. It is anticipated that reporting for ‘standard’ transactions arranged by voice or executed on an electronic platform or marketplace, including all orders, contracts and trades, to ACER will start in September 2015, with the reporting of ‘non-standard’ trades and contracts by Market Participants (MPs) following in March 2016.
The vast majority of transactions eligible for reporting under REMIT are executed on Organised Market Places (OMPs) which include exchanges, auction platforms and, most significantly, the energy broker platforms and/or their voice brokering and voice assisted services. The London Energy Brokers account for the lion’s share of the ‘standard’ transactions in which ACER is interested.
To best meet their customers’ needs for REMIT reporting, these major London based brokerages are engaging with potential solution providers, including EFET’s own EFETnet, to implement an open industry standard for regulatory reporting under various regulatory structures, including Dodd-Frank, EMIR and now REMIT. This open standard was created by the European Federation of Energy Traders (EFET) and is known as eRR: electronic Regulatory Reporting.
Customers benefit from the collaboration between the major London based brokerages and EFETnet as it brings together all their reportable information into one place to establish a ‘golden’ copy of all reported data. This comprises orders, trades and contract definitions for REMIT reported by participating brokers and other OMPs as well as all ‘non-standard’ trade and contract data reported by market participants themselves through eRR, as well as their trade reporting under EMIR and other supported regulatory regimes.
The provision of a single ‘viewing window’, showing the linkage between trades, orders and contracts as well as matching status between buys and sells for all transaction data reported through eRR, is a key benefit for Market Participants under REMIT because ACER’s ‘ARIS’ database does not provide any user access, meaning eRR can provide a unique and essential control point for REMIT where any rejections or other exceptions can be managed and resolved and data reported on their behalf by brokers and other OMPs can be monitored, ensuring a fully reconciled compliancy position.
Hugh Brunswick, Managing Director of EFETnet said: “The collaboration between the major London based brokers and EFETnet establishes a benchmark REMIT service for the whole industry that will ensure deadlines are met and compliancy risk are addressed.”
Jeremy Elliott, Managing Director, Energy at MarexSpectron said: “Our aim is to act now to ensure that we and our clients are absolutely confident, well ahead of the implementation date, that we will all be able to meet our obligations under REMIT. Our contribution to the development of the EFETnet system is an important part of achieving that and we look forward to working with EFETnet and other RRMs to ensure clients get a choice of robust, secure, cost effective and efficient solutions.”
Simon Davidson, Griffin Markets said: “Griffin has been a major contributor to discussions which have shaped the format of REMIT reporting and is committed to continuing that work to ensure the market has workable reporting solutions in place in good time for the start of the obligations. It is important that the market pulls together at times like this and we look forward to furthering our co-operation with EFET, EFETnet and other RRMs to provide the market with the tools it needs to tackle what will be a significant challenge.” ”
Participating brokers so far are: MarexSpectron, Tradition Financial Services and Griffin Markets. EFETnet is in discussion with other brokers.
EFETnet B.V. was set up in 2004 by the European Federation of Energy Traders (EFET). EFETnet was created to deliver the benefits of electronic data exchange standardisation which was first pioneered by EFET and its members. EFETnet develops and offers advanced software for automated energy trading at the lowest cost, based on open market standards, known as CpML.
Since 2011 EFETnet has offered the Central Matching Service (CMS), a central platform offering Straight Through Processing to over 80 energy trading entities. The CMS allows users to connect across the energy trading landscape using a simple interface, connecting the trading systems of organisations to the CMS back-end and allowing access via a web front-end. The CMS, a one-stop-shop solution, will simplify operation, reduce internal support effort and costs and improve business usage by offering a fully outsourced set of services for electronic Confirmation Matching (eCM), electronic eXchange Related Process (eXRP) for mandatory clearing and electronic Regulatory Reporting (eRR) for mandatory reporting and portfolio reconciliation.
EFETnet is the cost sharing vehicle for the energy trading industry and is a partner with extensive knowledge and experience in the market.
For more information:
More information about EFETnet and eRR at www.efetnet.org
Hugh Brunswick, EFETnet Managing Director, firstname.lastname@example.org