How can a market participant (Company A) fulfil its obligations under Article 4 of REMIT and comply with the prohibition under Article 3 of REMIT when:
(i) Company A holds an inside information relating to Company B’s facility (Company B is NOT a market participant);
(ii) Company A holds an inside information on the asset of another market participant (Company C). Company C does not consider the information to be inside information. However, Company A considers that this information meets the definition of inside information pursuant to Article 2(1) of REMIT, wherein the companies are not parent/related undertakings.
Answer: According to the 6th edition of the ACER Guidance on the application of REMIT (’’ACER Guidance’’, section 4.1): ‘’the obligation to disclose inside information does not apply to a person or a market participant who possesses inside information in respect of another market participant’s [or other entity’s] business or facilities, in so far as that owner of this inside information is not a parent or related undertaking. Notwithstanding this, persons holding information in such circumstances will need to consider their compliance with Article 3 and in particular whether they hold such information as one of the persons listed in Article 3(2).’’
Therefore, if a piece of information qualifies as inside information, Company A will need to consider its compliance with Article 3 of REMIT (prohibition of insider trading). In particular, Company A could hold such inside information as one of the persons listed in Article 3(2) of REMIT (e.g. persons with access to the information through the exercise of their employment, profession or duties under Article 3(2)(c) of REMIT).
Regarding case i), provided that the inside information is not published by Company B (which is not a REMIT market participant with obligations under Article 4(1) of REMIT), Company A will not be allowed to trade using such inside information as this would cause a potential breach of Article 3 of REMIT (insider trading). This situation can happen, for example, but not limited to, when Company A (REMIT MP) is buying/importing energy from: (i) outside EU, i.e. from an energy producer - Company B (not a REMIT MP) and the potential inside information relates to a facility of Company B located outside of the EU; or (ii) from an LSO/SSO, located outside EU, that is not a REMIT MP.
The Agency considers that Company A should also assess if it holds any other information concerning their own business or facilities that could qualify as inside information that should be published pursuant to Article 4(1) of REMIT. With regard to the example above, Company A should assess its possibility to publish the information about a certain amount of energy not being imported as originally foreseen (information concerning Company A’s own business).
The Agency would consider as best practice if Company B provided Company A with all the necessary information about its activities that affect or may affect Company A through contractual arrangements between the two, e.g. via a specific agreement or clause in the contract existing between the two companies. This should aim at facilitating Company A to publish inside information held by Company B that affect or may affect Company A’s activities.
Regarding case ii), the Agency considers that Company A should fulfil its obligations to publish the part of the inside information that concerns their own business or facilities pursuant to Article 4(1) of REMIT. In addition, the Agency would consider as best practice if Companies A and C exchanged between themselves all the necessary information about their activities that affect or may affect the other company, through contractual arrangements between the two, e.g. via a specific agreement or clause in the contract existing between the two companies. This should aim at facilitating both companies to publish inside information in case one company holds information that affects or may affect the other company’s activities.
Finally, please note that the Agency reserves the right to review its guidance on the disclosure of inside information relating to another entity’s business or facility in the future.