NewsRegulatory

REMIT Regulation | Game of Thrones

Alliances and stratagems. Turns out the political twists and turns of the REMIT regulation, the EU gas and power mandate, is like..”Game of Thrones complicated.”  There’s a very full field of new RRMs (HERE). Most are absolutely new to regulatory reporting. But, that’s not what’s

keeping people up at night.

OMP Fragmentation & Uncertainty = Compliance 🙁remit game of thrones

Exchanges

Market Participant’s data is going to be all over the place.  We count 34 physical gas and power exchanges subject to REMIT regulation.  Most have either created their own RRM or paired of with a “preferred RRM” that they will pump data to automatically.  CME will go to their own RRM,  ICE will go to their own RRM, Belpex will go to EEX etc, etc…  It’s all well and good, but if you need to make sure all your orders and trades are being reported correctly it’s a nightmare.

Brokers

A lot of physical gas and power is brokered.  And it’s the brokers who have to communicate orders and executions.  The big question is, where to?  A lot of the big brokers like ICAP have paired off with a “preferred RRM.”  A second group have fallen back on, “we are going to pump out ACER XML and send it where you want.”  A third group, who shall remain nameless, ask: “What is REMIT?”

But Here’s The Real Uncertainty

Not everyone is on board with communicating all this data via ACER XML.  In particular a lot of exchanges and possibly some brokers are not likely to give that data up as ACER XML in the near term.  They might send you a flat file, but it won’t be ACER XML.

Second, there are so many RRMs, it’s a setup for significant instability.  We have already heard rumors of serious price dropping to gain customers.  This is great for Market Participants, right up to the point that their RRM decides to call it a day.  Truth be told, running a repository is a very expensive proposition.  Demands for high security, painfully long legal approval and hurdles, not to mention the technology… makes for a very thin margins.

So It Comes to This

Every Market Participant, Every Exchange, Every Broker has got to develop a core competency around ACER XML.  That is taking flat data and turning it into ACER XML and vice versa.  The overall REMIT Regulation is complicated enough.  But this is one thing regulators may have gotten right:  a single standard to communicate trades.

Here’s Where We Can Help

K3 is up to the challenge.  We’ve set up a drop service for REMIT: Drop your CSV into a folder and it automatically converts it into ACER XML… instantly.  More?  We’re an integration company!  So we’ve integrated to Dropbox to make it even easier. Drop a file from anywhere and *Poof* Acer XML wherever you want it.

We’ve sliced and diced the ACER XML. There’s a handful of curveballs in there.

  • We will be having an webinar and try to kick off a discussion group on ACER XML
  • We’ve setup a Linkedin Group to share info.
  • Drop a note to Tom Eisner to get an invite to the webinar, Linkedin Group or to get a view of the REMIT drop service (tje@broadpeakpartners.com or info@broadpeakpartners.com).