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National implementation of REMIT Henrik Nygaard, Wholesale and transmission (DERA)

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Presentation on theme: "National implementation of REMIT Henrik Nygaard, Wholesale and transmission (DERA)"— Presentation transcript:

1 National implementation of REMIT Henrik Nygaard, Wholesale and transmission (DERA)

2 REMIT entered into force on 28th December 2011 It is a Regulation > it applies directly and shall not be transposed into national law It therefore became part of Danish law on 28th December 2011 (competent authority under REMIT = NRAs = DERA) This means that… The prohibitions in REMIT (against insider trading and market manipulation) apply from that date To be observed by market participants from that date Market participants shall publicly disclose inside information from that date (in a timely/effective manner) DERA – as national regulator – shall monitor and deal with market abuse from that date

3 However: Penalties are to be imposed nationally (EU principle) National enforcement powers to be implemented by 29 June 2013 Responsible: Member state = Ministry = DEA Right now: Interim period with no direct national sanctioning However: DERA intends to use existing legislation to its full extent Secondary law on wholesale market monitoring (2011) Includes provisions on distortion and limitation of competition Allows DERA to take measures within the limits of the existing legal framework

4 REMIT on penalties: “The penalties provided for must be effective, dissuasive and proportionate, reflecting the nature, duration and seriousness of the infringement, the damage caused to consumers and the potential gains from trading on the basis of inside information and market manipulation.” (Article 18) “…the penalties for breaches of this Regulation should be in line with the penalties adopted by the Member States in implementing Directive 2003/6/EC.” (recital 31) Directive 2003/6/EC = Market abuse directive/finance The penalties adopted in Denmark for market abuse in financial instruments are severe - thus: Penalties of up to 4 years’ imprisonment Extensive case law (including supreme court rulings) Penalties implemented in the Danish Securities Trading Act (Værdipapirhandelsloven)

5 DERA supports the view that market abuse in energy wholesale markets for electricity and gas is as severe as market abuse in financial markets This should be reflected in the national implementation of penalties However: Important to be aware of the fact that National rules on the standard of proof The obligations of DERA as NRA to ascertain the relevant facts of a case will not be affected by REMIT (there is due process protection)

6 Further implementation: Investigatory powers for NRAs (Article 13): Have access to any relevant document in any form Demand information from any relevant person Carry out on-site inspections Require existing telephone and existing data traffic records Require the cessation of any practice that is contrary to REMIT or delegated acts Request a court to freeze or sequester assets Request a court or any competent authority to impose a temporary prohibition of professional activity Powers may be exercised: Directly – in collaboration with other authorities – or by competent judicial authorities Use of the Danish Administration of Justice Act Right of appeal (Article 14) “Member States shall ensure that suitable mechanisms exist at national level under which a party affected by a decision of the national regulatory authority has a right of appeal to a body independent of the parties involved and of any government.” Right of appeal to the Danish Energy Board of Appeal (administrative appeal)

7 Further implementation: DERA plans to establish “appropriate form of cooperation” with the Danish FSA and the Danish Competition and Consumer Authority – as also foreseen in REMIT (Article 16) To ensure effective and efficient investigation and enforcement To contribute to a coherent and consistent approach to investigation, judicial proceedings and to the enforcement of the Regulation and relevant financial and competition law. DERA has already established a formal cooperation with the Danish Gas Exchange (also part of DERA’s overall market monitoring) Regular meetings Exchange of views and information on gas trading Also to be seen in the light of the REMIT obligation on “persons professionally arranging transactions in wholesale energy products” to notify the NRA of suspected breaches of Article 3 or 5 (Article 15)

8 Envisaged implementation plan in Denmark Enforcement powers and penalties to be implemented into the Danish electricity and natural gas supply acts (our main acts) – not secondary law Law proposal planned for introduction in January 2013 Public hearing planned for autumn 2012 In the hands of the Danish Ministry of Climate and Energy – not DERA However, DERA will be consulted and will contribute constructively to the process of implementation

9 Thank you

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