ACM’s priorities in its oversight of wholesale markets: monitoring the TTF and the publication of inside information
In 2023, the Netherlands Authority for Consumers and Markets (ACM) will, in its oversight of the wholesale market for energy, primarily focus on the trade on the Dutch trading platform for natural gas (TTF gas). The volume of natural gas that is traded on the Dutch TTF market is three times the volume on all other European trading platforms combined. Trade on the TTF therefore significantly impacts the energy prices that consumers and businesses in the Netherlands and in other Europeans countries have to pay. ACM monitors the trading patterns on the gas market for suspicious trading behavior, and can launch investigations where necessary. In addition, ACM keeps an eye on the correct publication of inside information.
ACM enforces compliance with the rules on transparency and integrity on the wholesale markets for electricity and natural gas under the EU Regulation on Wholesale Energy Market Integrity and Transparency (REMIT). Transparency and integrity ensure that prices are formed in a fair manner, and help ensure that consumers do not pay unjustified high prices for their energy needs. Oversight thereof is important for preventing profit-making based on market abuse, especially considering the higher prices and increased volatility on the wholesale markets.
In a nutshell, the REMIT rules stipulate that market participants cannot trade with inside information, and that market manipulation is prohibited. In addition, market participants are required to register with ACM, they are required to submit trading data to the European Union Agency for the Cooperation of Energy Regulators (ACER), and they need to publish inside information. Trading platforms are responsible for tracking down potentially suspicious orders and transactions, and to notify regulators of any suspicions of violations.
Besides the imposition of fines for serious violations, ACM also has other tools for promoting compliance with the rules. If ACM sees that market participants exhibit high-risk behavior, ACM can issue a warning or invite the market participant to a formal meeting and further explain the rules if necessary. In addition, ACM can get market participants to make concrete commitments about ending the undesired activities. ACM determines what instrument is the most suitable on a case-by-case basis.
ACM’s oversight priorities
In its oversight of the wholesale markets in 2023, ACM will predominantly focus on monitoring and surveillance of the TTF, oversight of trading platforms, timely publication of inside information, and the correct reporting of orders and transactions.
- Monitoring and surveillance of TTF. ACM’s activities with regard to monitoring and surveillance of wholesale markets for energy are particularly focused on the natural-gas market TTF because of its enormous impact at the international level. This concerns the detection of possibly suspicious trading behavior, the analysis and further investigation of indications, and, where necessary, taking action against market participants that violate the rules. In this context, ACM closely collaborates with other regulators, such as the Dutch Authority for the Financial Markets (AFM), ACER, and other European national energy regulators.
- Oversight of trading platforms. ACM is in regular contact with the largest trading platforms (PPATs), making sure that they perform their internal surveillance properly, and that they inform ACM of any suspicions of violations.
- Timely and effective publication of inside information. ACM has monitored compliance among electricity producers with the requirement to publish inside information in a timely and correct manner. ACM has concluded that compliance must be improved. ACM will continue to keep a close watch on compliance with the requirement to publish inside information in a timely and correct manner. ACM can step in if compliance does not improve sufficiently. Failure to publish inside information in a timely or correct manner increases the risk of insider trading.
- Reporting orders and transactions. One of the requirements under REMIT for market participants is the reporting of orders and transactions. Having up-to-date and complete trading data is critical for market oversight and for tracking down possible market abuse. If one member of an exchange (DMA provider) grants another business (DMA client) access for trading using its account, then both are considered market participants. In November 2022, ACER updated the instructions regarding the reporting of trading data in part because of those types of cases. ACM ensures that the relevant market participants report data in accordance with these instructions of ACER and register with CEREMP in accordance with the REMIT regulation, keeping this registration up-to-date.
Next to these substantive priorities, ACM will, several times per year, provide an overview of the activities performed by explaining current interventions, and by presenting graphs and indicators of its regulatory activities. This shows, for example, that, in 2022, more than half of the cases investigated by ACM concerned possible market manipulation, and that, in 9 cases, ACM took action against a market participant by means of an intervention. In addition, ACM can further explain the rules where necessary. Market participants may contact ACM with further questions by sending an email to REMIT [at] acm [punt] nl.