|EFET master agreements' reporting under REMIT - everything clear?|
|Thursday, 18 February 2016 12:00|
Are EFET master agreements reportable under REMIT? ACER's recent interpretations create confusion in the market.
With respect to REMIT reporting of master/framework agreements divergent a views can be observed recently on the part of the Ljubljana-based Agency for the Corporation of Energy Regulators (ACER).
On 29 May 2015 ACER in REMIT Q&A point III.3.11 expressed an opinion that the framework contracts have to be reported under REMIT in line with Article 3(1)(a) of Commission Implementing Regulation (EU) No 1348/2014.
But on 16 February 2016 the same Agency in the document Frequently Asked Questions (FAQs) on REMIT transaction reporting, 3rd Edition (Question 1.1.12) came to the opposite conclusion.
Pursuant to the modified view of the EU energy market regulator, a general agreement concerning the delivery and acceptance of electricity, i.e. the agreement, which sets out the general terms for trading, but does not specify the price setting of volume optionality, e.g. the amount of electricity, time and place of delivery and price, is not a reportable contract.
Agency explained, moreover, that only the individual contracts concluded under the terms of the above general agreement must be reported to the ACER under REMIT.
As follows from the formulation of the question that was asked, the problem arised on the ground of EFET master agreements.
Can anyone support the view that EFET master agreement is not a "framework contract"?
Both: such master (or framework) agreements have in common that they only set out the rules for trading activities of the two counterparties of a contract, but do not set any obligation to the two parties.
For those who reasonably argue that EFET master agreement qualify as "framework contracts", ACER's parallel and inherently opposite interpretations create confusion.
It needs to be added that the interpretation of May 2015 has not been amended or deleted from the ACER's REMIT Q&A point III.3.11.
There seems no way for reconciliation of divergent views.
The aforementioned ACER's interpretations are available here.
If counterpartpies conclude the EFET General Master Agreement, but they do not enter into individual contracts yet, a real problem arises, which of the two interpretations apply.
Personally, the latter of the above ACER's opinions is more convincing to me.