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The notion of "inside information" under REMIT

 

 

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 four constituent elements of the above definition are:

 

- 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.

 

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.

 

The first thing to consider is the scope of the notion of "information" under 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.

 

The application of the criteria for the definition of inside information is still the subject of vivid discussion - see the ACER’s public consultation of 17 July 2019, PC_2019_R_05.  

 

ACER asks, among others, the following question:

“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 regard in fact, not the definition itself of the inside information, but the publication process.

 

 

 

 

chronicle

 The definition of inside information under REMIT - regulatory chronicle 

  

 

 

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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    Links    

  

 

 

 

Transparency platforms 

 

 

 

 

 

 

Last Updated on Thursday, 22 August 2019 13:21
 

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