Brussels, 08/12/2010 (Agence Europe) - To prevent market manipulation and insider trading, the European Commission is proposing rules on wholesale energy markets. The ACER will play a crucial role.
On Wednesday 8 December, Commissioner for Energy Günther Oettinger presented a draft regulation to prevent market manipulation and insider dealing on the wholesale energy markets, where gas and electricity are traded between companies producing energy and traders, and which are key to the prices that consumers (businesses and individuals) finally pay.
More than in other sectors, market prices are highly sensitive to the availability of production and transmission capacities. This is due to the fact that electricity cannot be stored on an industrial scale. It is for this reason that prices can be influenced easily by creating a false impression about the availability of capacities or indeed by reducing actual production. Europe's wholesale energy markets are also increasingly cross-border in nature. Price setting is not tied to single countries. It occurs through the interaction of supply and demand across national boundaries. Wholesale markets are also cross-platform. Transactions are frequently concluded outside the country to which the trades relate. While all this is beneficial for market integration, it opens ways for market abuses transcending national borders.
The objective of the proposed regulation is therefore to guarantee market transparency by obliging energy traders to comply with clear rules and not use inside information to benefit from their transactions or manipulate the market by artificially causing prices to be higher than would be justified by the availability, production cost or capacity to store or transport energy. The rules prohibit the following: use of inside information when selling or buying at wholesale energy markets; transactions that give false or misleading signals about the supply, demand or on prices of wholesale energy market products; distributing false news or rumours that give misleading signals on these products.
The regulation therefore proposes granting a crucial role to the European Agency for the Cooperation of Energy Regulators (ACER), which will be responsible for market monitoring to uncover possible cases of abuse. The Agency must have timely access to the complete information on the transactions taking place at wholesale energy markets. This includes information on the price, the quantity sold and the counterparties involved. The data will also be shared with national regulators who will also be responsible for detailed investigation of suspected abuse. In complex cross-border cases the ACER will coordinate investigations. Sanctions will be applied by the national regulators in member states. (E.H./transl.fl)