As market participants will not be allowed to trade until they are registered, it may potentially represent a barrier to trade in the internal energy market.
Registration will not be a one-off event, but rather an ongoing requirement due to obligation to keep information provided up-to-date. From the practical point of view it is therefore necessary to establish within corporate structures of market participants arrangements ensuring that new requirements will be properly and timely discharged.
It should be noted that market participants are under obligation to register even if they are located outside the European Union.
Another issue of potential significance for the wider market is the commercial exploitation for data contained in the part of the register publicly revealed by ACER.
On 18 April 2012 ACER has revealed Public Consultation Paper ‘REMIT Registration Format’ (PC_012_R_08). The document sets out preliminary views of the Agency with respect to the imminent registration for energy market participants.
Some of the information for REMIT Registration Format are quite basic and include:
o Legal entity name;
o Legal form;
o VAT number;
o Member State or country of establishment (head quarter);
Note - the issues referred to in this article have been subsequently specified in ACER Decision No 01/2012 of 26 June 2012 relating to the Registration Format pursuant to Article 9(3) of Regulation (EU) No 1227/2011, which can be accessed through the following link.
o Full address of establishment, including postal code;
o NRA which processes the registration;
o Energy Identifier Code (EIC, only if available);
o Bank Identifier Code (BIC, only if available);
o Other code used with TSOs, e.g. GS1: type and value (only if available);
o Legal Entity Identifier (LEI, only from when this new international code will be available);
o Place of publication of insider information;
o Website (URL).
Data on corporate structure
Registration with ACER will, however, also contain data on corporate structure needed to ensure the identification of “parent undertaking” and/or “related undertakings”. The type of relation will be established according to the Seventh Council Directive 83/349/EEC of 13 June 1983 (Articles 1, 2 and 12(1)).
The procedure will require the identification of each ultimate controller or beneficiary of the market participant’s trading activities. In that regard it is useful to note that the ultimate controller or beneficiary is not necessarily a market participant, (e.g. holding companies) and can be either a natural person or a legal entity.
ACER also points to the fact that according to Article 12(1) of the Seventh Council Directive 83/349/EEC of 13 June 1983, two undertakings are “related undertakings” if there is a unitary direction: this means that the proposed approach should catch intra-group relationships between two or more market participants, even when they are linked to each other only through a common parent undertaking not being a market participant itself. Such links among the registered operators must be recorded and updated in the European register.
The Agency believes that, for the purpose of REMIT, it is sufficient to require market participants to state the nature of any corporate relationship with other market participants already registered, selecting among the types listed in Directive 83/349/EEC. Practically, when a new market participant registers, the IT-system will notify the relevant National Regulatory Authority and the market participants already registered and identified by the new registrant as related or parent undertakings, of the relationship declared by the new registrant, in order to have their confirmation.
ACER considers that taking also into consideration the OECD recommendations for upfront disclosure mechanisms, further information must be collected for:
– Corporations, when a non publicly-traded corporation holds shares in a corporate entity, or when shares in the corporation are held by a trust or by a partnership, or in other few special cases;
– Trusts: in this case it is necessary to collect the identity of:
i. Individuals who furnish funds in the trust;
ii. The trust beneficiaries and the trustee;
iii. The persons who control the trust and make the investment decision.
– Partnerships: in this case it is necessary to collect the identity of:
i. The general partner as well as the limited partners;
ii. If a corporate entity is general or limited partner of a partnership, the ultimate beneficiary of the corporate entities.
– Foundation: in this case it is necessary to collect the identity of:
i. The designated beneficiaries of the foundation;
ii. The persons who are in control of the foundation and who are responsible for the allocation of its resources.