The REMIT Regulation in Article 2(1) defines 'inside information' as non-public information of a precise nature relating to a wholesale energy product which, if it were made public, would be likely to significantly affect the price of that product.

 

The European Agency for the Cooperation od Energy Regulators (ACER) in the 5th Edition of its Guidance on the application of REMIT od 8 April 2020 indicates that qualifying a specific fact as ‘inside information’ under REMIT requires a two-step approach:

 

1. it must be determined whether there is an item of information (according to at least one of (a) to (d) criteria defined in Article 2(1), second subparagraph, of REMIT),


2. it must be ascertained whether it fulfils the four cumulative conditions established in Article 2(1), first subparagraph, of REMIT, i.e. it is:

 

- precise,


- not public,


- related, directly or indirectly, to one or more wholesale energy products, and


- likely to significantly affect the prices.

 

Negative precondition for the classifying the relevant piece of data as inside information under REMIT is when it constitutes market participant's own trading plans and strategies.

 

Firstly, however, it is to be considered whether a particular piece of information is within the scope of the notion of "information" under the REMIT "inside information" rules. 

 

In this regard "information" includes various information required to be made public as well as, more generally, any information that a reasonable market participant would be likely to use in its decision to trade in a wholesale energy product.

 

Such information must be crucial enough to have a potential to significantly affect prices, although no actual price effect is required.

 

ACER suggests the following as useful indicators of whether information is likely to have a significant price effect:

 

— the type of information is the same as information which has previously had a significant effect on prices,

 

— analysts' research reports, price reporter publications and opinions indicate that the type of information has a significant effect on prices or

 

— the market participant itself or another reasonable market participant has already treated similar events as inside information.

 

 

“Transparency information” vs. “Inside information” and “Regulated information”

 

 

The criteria for differentiation of terms: “inside information”, "transparency information” and “regulated information” are as follows:

 

Inside-information-remit1. “transparency information” means fundamental data information according to Regulations (EC) No 714/2009 and (EC) No 715/2009, including applicable:

 

network codes, and

 

- guidelines (see, in particular, Commission Regulation 543/2013 of 14 June 2013 on submission and publication of data in electricity markets and amending Annex I to Regulation (EC) No 714/2009 of the European Parliament and of the Council);

 

2. “regulated information” means inside information and transparency information.

 

Additional comments on the precise meaning of the above delineations can be found in the ACER's document of 23 October 2012.

 

Thus, the concept of "inside information" comprises on the one hand only that transparency information that is likely to have a significant effect on the prices of wholesale energy products, but on the other hand goes even beyond and also includes other information that a reasonable market participant would be likely to use as part of the basis of its decision to enter into a transaction relating to, or to issue an order to trade in, a wholesale energy product, insofar as this information is likely to have a significant effect on the prices of wholesale energy products.

 

This means that transparency information is periodic, structured data subject to the above legal measures, inside information, in turn, can be considered as an ad hoc, structured data that is likely to have a significant effect on price that has not been disclosed to the market.

 

Such a requirement goes beyond the periodic and regular publication of data under the above regulations and may highlight or pre-empt certain transparency data.

 

Inside information may relate to any item of information that is within the scope of the above regulations as well as the following further information insofar as this information is likely to have a significant effect on the prices of wholesale energy products:

 

- information relating to the capacity and use of facilities for production of electricity or natural gas, including planned and unplanned unavailability of these facilities;

 

- information relating to the capacity and use of facilities for storage of electricity or natural gas, including planned and unplanned availability of these facilities;

 

- information relating to the capacity and use of facilities for consumption of electricity or natural gas, including planned and unplanned unavailability of these facilities;

 

- information relating to the capacity and use of facilities for transmission, including planned or unplanned unavailability of these facilities;

 

- information relating to the capacity and use of LNG facilities, including planned and unplanned unavailability of these facilities;

 

- information required to be issued in accordance with legal or regulatory provisions at Union, or national level;

 

- information required to be issued in accordance with Market Rules;

 

- information required to be issued in accordance with contracts;

 

- information required to be issued in accordance with customs on the market;

 

- other information that a reasonable market participant would be likely to use as part of the basis of its decision to enter into a transaction relating to, or to issue an order to trade in, a wholesale energy product.

 

 

Reasonable market participant test

 

On 8 April 2020 the ACER published the 5th Edition of its Guidance on the application of REMIT containing more detailed guidance concerning the definition of information and inside information under REMIT.

 

In particular, the concept of the “reasonable market participant” has been explained.

 

 

REMIT, Article 2(1)

 

‘inside information’ means information of a precise nature which has not been made public, which relates, directly or indirectly, to one or more wholesale energy products and which, if it were made public, would be likely to significantly affect the prices of those wholesale energy products.

 

For the purposes of this definition, ‘information’ means:

 

(a) information which is required to be made public in accordance with Regulations (EC) No 714/2009 and (EC) No 715/2009, including guidelines and network codes adopted pursuant to those Regulations;

 

(b) information relating to the capacity and use of facilities for production, storage, consumption or transmission of electricity or natural gas or related to the capacity and use of LNG facilities, including planned or unplanned unavailability of these facilities;

 

(c) information which is required to be disclosed in accordance with legal or regulatory provisions at Union or national level, market rules, and contracts or customs on the relevant wholesale energy market, in so far as this information is likely to have a significant effect on the prices of wholesale energy products; and

 

(d) other information that a reasonable market participant would be likely to use as part of the basis of its decision to enter into a transaction relating to, or to issue an order to trade in, a wholesale energy product.

 

Information shall be deemed to be of a precise nature if it indicates a set of circumstances which exists or may reasonably be expected to come into existence, or an event which has occurred or may reasonably be expected to do so, and if it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circum­stances or event on the prices of wholesale energy products.

 

The publication has been preceded by the ACER’s public consultation published on 17 July 2019 (PC_2019_R_05).

 

The consultation questions included, among others:
“What are your experiences so far regarding the assessment of inside information that you have possessed? Which criteria do you apply for the assessment for the disclosure of inside information? Please describe your assessment of whether an information is to be considered an inside information. Please describe the process step by step including the tools used and the participants involved.”

 

Other consultation questions regarded in fact, not the definition itself of the inside information, but the publication process.

 

In the 5th Edition of its Guidance on the application of REMIT ACER recommends that National Regulatory Authorities (NRAs) use the ‘reasonable market participant test’ to help determine whether a given fact qualifies as ‘information’ under REMIT, but only when such facts is not already covered by Articles 2(1)(a), (b) and (c) of REMIT.

 

It is the Agency’s understanding that the concept of the ‘reasonable market participant’ may encompass different profiles of market participants (e.g. beginner, average, informed, professional market participant) with different trading strategies (e.g. portfolio optimisation, arbitrage, speculative) covering short-term and/or long-term products.

 

According to the ACER, the concept of ‘reasonability’ is rather related to the use of cognitive elements by the market participant in its trading decisions (at least partially); by contrast, a market participant that makes trading decisions based on non-cognitive elements, such as instinct or mood, should not be considered reasonable.

 

To qualify a fact as information under REMIT, it is enough that at least one of these profiles is likely to use the fact as part of the basis of their decision to enter into a transaction relating to a wholesale energy product, or their decision to issue an order to trade in a wholesale energy product.

 

When using the ‘reasonable market participant test’, the NRAs may take into consideration, as indicators, that:

 

- the concept of ‘would be likely to use’ should be distinguished from the concept of ‘would like to use’ – the test is not about whether there is a wish on the part of the reasonable market participant to use some type of information. Rather, the test is used to assess whether it is reasonable for a market participant to have a legitimate expectation that such information is available.

 

- therefore, the concept of ‘would be likely to use’ should be interpreted based on what can be reasonably expected to be published (for example, the fact that a market participant would like to use its competitors’ trading plans for its own trading strategy does not mean that these plans are ‘information’ under REMIT, as they are not information that ‘can reasonably be expected to be published’ and that would likely be used by a reasonable market participant).

 

- the fact that a market participant used comparable facts (for example, at a different moment in time) as the basis for its trading decisions, could be considered a proxy to further assess with an ad hoc analysis if the fact is information that would be likely to be used by a ‘reasonable market participant’.

 

ACER in the 5th Edition of its Guidance on the application of REMIT gives also some examples of information under REMIT:

 

1. Information on the TSO’s available transfer capacity - the estimates of TSOs A and B of the available transfer capacity for each day and the available transfer capacity already reserved in the electricity interconnector between bidding zones C and D.

 

ACER assessment in this regard is that these facts are information under REMIT because they relate to information required to be disclosed in accordance with Regulation (EC) No 2019/943, according to Article 50(3) thereof, TSOs shall publish estimates of available transfer capacity for each day, indicating any available transfer capacity already reserved.

 

2. Information on the annual maintenance of generation units - market participant A plans to perform annual maintenance on its electricity generation unit XPTO, with a total capacity of 50 MW from 01/02/2025 to 01/04/2025.

 

ACER assessment in this regard is that this fact is information under REMIT as it constitutes information relating to the capacity and use of facilities for the production of electricity as specified in Article 2(1)(b) of REMIT. The fact that the unavailable capacity is below the 100 MW threshold included in Regulation (EC) No 543/2013 is relevant for the assessment of whether it constitutes information under Article 2(1)(c) of REMIT but not under Articles 2(1)(a), (b) and (d) of REMIT.

 

 

 

 

chronicle

 Definition of inside information under REMIT - regulatory chronicle 

  

 

 

 

 

8 April 2020

 

ACER publishes the 5th Edition of its Guidance on the application of REMIT containing more detailed clarifications concerning the definition of information and inside information under REMIT

 

17 July 2019

 

ACER’s public consultation on definition of inside information PC_2019_R_05 

 

 

 

 

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    Documentation    

 

 

 

 

 

REMIT, Article 2(1)

 

 

 

 

 

 

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