Welcome back to our ‘ACER REMIT Reporting’ series.  In our last post, we reviewed the relevant dates and deadlines that will ensure timely compliance with the updated REMIT requirements. Keep reading to learn about the changes in the logic of transaction reporting that may affect you. 

REMIT regulations essentially lays the framework for monitoring wholesale energy markets, and further prohibits abuses such as insider trading and market manipulation.  REMIT’s introduction of a new series of trade requirements is designed to enhance data reporting and market monitoring regime. This is one of the most important substantive changes to the REMIT framework.  Other primary changes include updates to the definition of “Market Manipulation”, and enhancements to ‘Inside Information’ rules making it mandatory for market participants to disclose inside information through authorized Inside Information Platforms (“IIPs”), harmonization of fines, and the addition of new contracts by changing the definition of ‘wholesale energy products’, among others.   

In this article of our 4-part series covering ACER REMIT reporting changes, we will specifically examine the key amendments that resulted in updated trade data reporting obligations.  We’ll also provide some actionable steps to help mitigate risk.   

Reporting Changes Introduced & Essentia’s Suggested Actions  

• Updated Transaction Reporting User Manual (TRUM) Version 5.2 can be found here:  TRUM Version 5.2 (Clean and Redlined). TRUM (version 5.2) mainly focuses on clarifying the reporting obligations for broker organized market places (broker OMPs), and also, for market participants entering into transactions on wholesale energy markets via third party accounts (focusing on Direct Market Access).   

• A new electronic format version for the reporting of REMIT Table 1 transactions has been released. This new version implements selected changes from the public consultation on the revision of electronic formats for transaction data, fundamental data and inside reporting. Changes required for alignment of the electronic format with the TRUM will also be included.  

• New Electronic Format to facilitate the reporting of Natural Gas Transportation and Table 1 Contracts. Details on the updated format can be found by navigating to: ACER Notice_17.4.2023; Technical Specs & Schema defining the new format can be found here: Version 3 Electronic Version_Table 1_Schema; REMIT Knowledge Base URL to retrieve artifacts required for proper implementation: REMIT Knowledge Base.
  
  
• Updated FAQs on REMIT Transaction Reporting provides guidance on specific business scenarios to better reflect the development of the trading activity on the EU wholesale energy market (e.g., transactions concluded via Direct Market Access and trades cleared on exchanges). Link: FAQs on Transaction Reporting (europa.eu)  

Updated Annexes, specifically:  

#	TRUM Annex – Title & Version	Annex Structure & Changes Implemented
1	Annex II – Examples of Transaction Reporting Version 4.2	Annex II to the TRUM presents examples of transaction reporting for both standard and non-standard contracts. The updated examples now show what to include in the transaction reports of wholesale energy products traded on auction and continuous markets, broker platform, and bilateral trades. In addition, Annex II to the TRUM provides new examples of reporting transportation gas and electricity contracts for both primary and secondary allocation.    Across Annex II document, the below captures the specifics on which Tables have updated or new examples.   – 1.) Table 1 for Orders & Trades: 4 Contract examples have been revised with new descriptions, required fields vs. optional – 2.) Table 2 for Non-Standard Deals: 2 out of the current 57 contract examples were revised. 4 Non-Standard contract examples were newly added for Table 2  – 3.) Transportation Contracts using Table 3 & 4: 7 revised examples for electricity transportation contracts. 2 new gas transportation contract examples added   *Note:  All Contract examples within Annex II must now adopt the new ‘Delivery Point or Zone’ codes enumerated in Annex II.  Such codes are not intended to represent real delivery point or zone codes.
2	Annex III – Reporting of REMIT Derivative Contracts Version 2.1	In order for a transaction or order in a derivative contract to be executed on an organized market place (OMP), a chain of entities is involved.  ACER has developed new, additional guidance in order to clarify further which entity (entities) in the chain is (are) considered to be “market participant(s)” under REMIT and therefore have to register with the national regulatory authority and on which party (parties) lie(s) the reporting obligation, what transactions have to be reported, what data have to be reported and who will do the actual reporting.  Annex III changes cover the following 7 key areas:   – 1.) (New) – All ACER “Market Participants” must obtain an ACER Code from an EU-27 NRA to enable their REMIT Reporting.  – 2.) (New) – Wholesale Energy Markets – Physical vs. Financial  – new definitions for each market and the respective entities participating in such markets.    – 3.) (Amended) – Exchange Traded Derivatives and revised guidance on reporting then from Brokers perspective, Venues perspective, Investment Manager and its Client perspective.    – 4.) (New) – Possible trading scenarios and respective illustrations provided  to help entities understand who has the onus to report, how to, and which registered entity to send the reportable transaction to (e.g. a third party RRM or a Trade Repository).    – 5.) (Amended) – The Exchanges, who are obligated to offer a “Standardized Service Offering”, have new revisions to adhere to, requiring them to report details of orders and transactions executed to a designated, registered RRM.    – 6.) (Amended) – Members of an Exchange are reminded of their obligation to check the reports provided by the Exchanges. Members should provide their EU member state ACER Code and LEI Code to the Exchanges prior to engaging in trading activity.  – 7.) (Amended) – ACER mandates that both the DMA provider and the DMA client fall under the definition of market participants under REMIT. When the account of the DMA provider is used for the order lifecycle and for executing trades, then the DMA provider (not the DMA client), is responsible for all trading activity and compliance with REMIT, and shall be reported in Data Field (1). DMA clients shall instead be identified using Data Field (8) Beneficiary ID. Further guidance on how to report as DMA provider and DMA client is provided in Annex III.
3	Annex IV – Guidance on UTI  Version 2.1	– ACER has defined new requirements to generate a Unique transaction identifier (UTI) Generator, what the allowed values are, special characters, supported forms for dual-reporting of any bilateral contract, and has provided the generator tool to help provide consistency in the generation of UTIs.  – The Agency’s UTI generator is based on an excel spreadsheet which is now available on the Agency’s REMIT portal.
4	Annex V – Abbreviations Version 1.1	New abbreviations and concepts introduced, and some existing ones deprecated.  – 4 new abbreviations introduced.   – 9 abbreviations deprecated.
5	Annex VII – Guidance on Reporting Lifecycle Events  Version 1.1	Clarifications on Lifecycle Event reporting on Orders and Trades. The primary changes introduced on reporting subsequent trading activities and lifecycle events are summarized below.  However, a full assessment should be performed where both the TRUM and Annex VII should be consulted together.  The key changes are:   – New guidelines on the timely reporting of lifecycle events   – New guidelines on Exceptions of when lifecycle events do not need to be reported.   – New guidelines on what and what does not constitutes a Modification   – New guidelines on what does and does not consititute a Cancellation   – New fundamental fields defined, and the corresponding the data validation rules, which will be used by ACER.    – 8 fields newly defined for Table 1 lifecycle event reporting  – 5 fields newly defined for Table 2 lifecycle event reporting   – 10 scenarios revised with updated guidance on what  defines a legal combination of ‘ActionType’ + ‘EventType’ field values to be provided when reporting an order or trade lifecycle event.    – The Exchange will have records of the trades as executed but will be unaware of any amendments or lifecycle events that take place post execution. All post transaction activities (fixing fat-finger errors, reporting lifecycle events, modifying trade data) are to be reported by the market participants themselves via their chosen RRM.  OMPs are not obligated to provide such services with respect to lifecycle events.

How Can Essentia Help?

We hope you enjoyed learning about the upcoming changes in this part-3 of our series. However, you may have questions on the impacted trade data fields that are being newly introduced or revised.  Have you reviewed TRUM version 5.2 and assessed the impact to your REMIT reporting workflows?  Or do you know how to implement the new electronic reporting format for your EU gas transportation contracts?   

Essentia is here to help answer these questions, and guide you through the process. Essentia can help you stay on top of all these regulatory changes, resolve operational issues and challenges, and achieve compliance. If you’re uncertain about what’s happening or how to move forward, please contact us and we’ll quickly help you get this sorted, an action plan in place, and ensure your org remains compliant.

That’s a wrap for part-3 of this blog series. In case you missed them, make sure to catch-up on part-1, and part-2, introducing key impacts and deadlines for submitting reports. Also, stay tuned for the finale in part-4, in which we will devise an Essentia-client, action-plan to help you with your next steps.

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About Essentia

Essentia is a Houston-based consulting firm focused on partnering with energy and commodity trading companies to help them maximize their return on investment from trading systems & technologies. Since our founding in 2016, our team has grown to 85 full-time consultants who have, as Essentia, implemented or upgraded Energy Trading & Risk Management (ETRM) solutions at more than two dozen companies across North America. With an experience-laden team and hyper-focus on the client, we are proud of our record of taking clients From Start to Success and our impressive client satisfaction, as demonstrated by subsequent engagements with many of our clients.

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