National implementation of REMIT
Henrik Nygaard, Wholesale and transmission (DERA)
• REMIT entered into force on 28th December 2011
• It is a Regulation > it applies directly and shall not be
transposed into national law
• It therefore became part of Danish law on 28th December
2011 (competent authority under REMIT = NRAs = DERA)
• This means that…
• The prohibitions in REMIT (against insider trading and
market manipulation) apply from that date
•
To be observed by market participants from that date
• Market participants shall publicly disclose inside
information from that date (in a timely/effective manner)
• DERA – as national regulator – shall monitor and deal
with market abuse from that date
• However:
• Penalties are to be imposed nationally (EU principle)
• National enforcement powers to be implemented by 29 June 2013
• Responsible: Member state = Ministry = DEA
• Right now: Interim period with no direct national sanctioning
• However:
•
DERA intends to use existing legislation to its full extent
•
Secondary law on wholesale market monitoring (2011)
•
Includes provisions on distortion and limitation of competition
•
Allows DERA to take measures within the limits of the existing
legal framework
• REMIT on penalties:
“The penalties provided for must be effective, dissuasive and
proportionate, reflecting the nature, duration and seriousness of the
infringement, the damage caused to consumers and the potential
gains from trading on the basis of inside information and market
manipulation.” (Article 18)
“…the penalties for breaches of this Regulation should be in line with
the penalties adopted by the Member States in implementing
Directive 2003/6/EC.” (recital 31)
• Directive 2003/6/EC = Market abuse directive/finance
• The penalties adopted in Denmark for market abuse in
financial instruments are severe - thus:
• Penalties of up to 4 years’ imprisonment
• Extensive case law (including supreme court rulings)
• Penalties implemented in the Danish Securities Trading Act
(Værdipapirhandelsloven)
• DERA supports the view that market abuse in energy
wholesale markets for electricity and gas is as severe as market
abuse in financial markets
• This should be reflected in the national implementation of
penalties
• However: Important to be aware of the fact that
• National rules on the standard of proof
• The obligations of DERA as NRA to ascertain the relevant facts of a
case
will not be affected by REMIT (there is due process protection)
• Further implementation:
•
•
Investigatory powers for NRAs (Article 13):
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Have access to any relevant document in any form
Demand information from any relevant person
Carry out on-site inspections
Require existing telephone and existing data traffic records
Require the cessation of any practice that is contrary to REMIT or delegated acts
Request a court to freeze or sequester assets
Request a court or any competent authority to impose a temporary prohibition of professional activity
•
•
Powers may be exercised: Directly – in collaboration with other authorities – or by competent judicial authorities
Use of the Danish Administration of Justice Act
Right of appeal (Article 14)
“Member States shall ensure that suitable mechanisms exist at national level under which a party affected by a
decision of the national regulatory authority has a right of appeal to a body independent of the parties involved and of
any government.”
•
Right of appeal to the Danish Energy Board of Appeal (administrative appeal)
• Further implementation:
• DERA plans to establish “appropriate form of cooperation” with the Danish FSA
and the Danish Competition and Consumer Authority – as also foreseen in
REMIT (Article 16)
• To ensure effective and efficient investigation and enforcement
• To contribute to a coherent and consistent approach to investigation, judicial
proceedings and to the enforcement of the Regulation and relevant financial
and competition law.
• DERA has already established a formal cooperation with the Danish Gas
Exchange (also part of DERA’s overall market monitoring)
• Regular meetings
• Exchange of views and information on gas trading
• Also to be seen in the light of the REMIT obligation on “persons professionally
arranging transactions in wholesale energy products” to notify the NRA of
suspected breaches of Article 3 or 5 (Article 15)
• Envisaged implementation plan in Denmark
• Enforcement powers and penalties to be implemented into the
Danish electricity and natural gas supply acts (our main acts) – not
secondary law
• Law proposal planned for introduction in January 2013
• Public hearing planned for autumn 2012
• In the hands of the Danish Ministry of Climate and Energy – not DERA
• However, DERA will be consulted and will contribute constructively to
the process of implementation
Thank you