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electronic Trade Monitoring

Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) and the Market Abuse Regulation (MAR) are two pieces of EU regulation that promote a culture of monitoring trading behaviour amongst participants in European energy markets. MAR includes an explicit obligation requiring participants in traded markets, including the European energy wholesale markets, to introduce appropriate systems to monitor for breaches; whilst REMIT empowers and provides regulators with the tools to monitor the trading behaviour of participants. Penalties can be severe incentivising participants to monitor their own behaviour for abuse and so avoid the risk or penalties with or without an explicit obligation in the text of the regulation.

The MAR obligations are non-prescriptive and although REMIT does define a range of abusive trading patterns it contains no explicit implementation guidance either. In the absence of regulatory guidance, taking a shared approach to automated trade monitoring based on a common risk profile helps establish clarity trade monitoring around compliance obligations and how they can be addressed as economically as possible.  Although each entity must adopt a tailored approach to monitoring based on risk and size, the commonality between the majority of market participants’ risk profiles means a common technical framework that can be individually calibrated offers a low risk and cost effective approach to implementing compliance with regulation.

Equias is providing a compliance solution for a critical mass of companies implementing their obligations in a consistent way, which is configurable to each company’s unique situation and approach to trade monitoring.

Any monitoring system requires a constant flow of high-quality data - orders and trades, whether traded on exchange, via broker, or bilaterally. Through the central collection of transaction data under EMIR and REMIT regulations for over 700 traders active in EU energy markets, Equias have already done the heavy lifting of data collection and cleaning. This data can be reused for trade monitoring  – centrally, and without the need for a costly IT project at the market participant’s end.

For more information please contact the Support Team at support@equias.org