The USAID Energy Security Project (ESP) helped the National Energy and Utility Regulatory Commission (NEURC) launch a series of specialized training to provide competent employees of the Regulator with knowledge and skills in the practical application of the European Regulation No 1227/2011 on wholesale energy market Integrity and transparency (REMIT).
During the first specialized training, “Market Manipulation – Abuse Schemes,” NEURC’s specialists learned to recognize and detect manipulation in the wholesale energy markets.
This series of trainings is part of a set of measures planned by USAID ESP in cooperation with NEURC to implement an effective and compliant with European practices REMIT system in Ukraine. The training aimed to strengthen the institutional capacity of the Regulator by enhancing its staff’s competencies and skills to ensure the impartial, professional, and effective application of NEURC’s rights and powers in the framework of REMIT implementation.
The participants of the training looked into four main categories of behavior that fall under the general definition of “market manipulation” and “attempt to manipulate the market” under Articles 2(2) and 2(3) of REMIT, namely:
a) transactions “on the market” (effecting of any deal or submitting of any order for trading in wholesale energy products), which constitute:
• giving false or misleading signals
• securing the price at an artificial level
• employing a fictitious device, deception, or contrivance
b) “off-market” actions (intentionally giving false or misleading signals through the media, including the Internet, or by any other means), which constitute disseminating false and misleading information.
In addition, the participants had the opportunity to study specific examples of manipulation in detail, such as instant transactions, intermarket manipulation, dissemination of false or misleading information, etc. Real-life examples were used to illustrate these schemes.
As a result, the training participants understood the conditions under which certain activities are qualified as manipulative, considering factors such as the size of the market participant, the time of submitting the order, the type of order, etc.
The Law of Ukraine No. 3141-IX, “On Amendments to Certain Laws of Ukraine on Prevention of Abuse in Wholesale Energy Markets,” intended to transpose and implement the European REMIT Regulation into Ukrainian legislation and whose provisions were to enable fast and effective regulation of wholesale energy markets in terms of ensuring an appropriate level of transparency, timely detection and prevention of abuse, bringing violators to justice for abuse, deterring potential violators from committing future abuses and, in general, to protect the interests of honest market participants and, ultimately, end consumers.
According to USAID ESP experts, the adopted Law still needs to be improved, so USAID ESP has already submitted detailed recommendations to the Verkhovna Rada Committee on Energy and Utilities, NEURC, and the Energy Community Secretariat and provided them to the European Commission and recently offered to assist NEURC in preparing proposals for improving both the primary legislation implementing REMIT and the relevant regulatory acts adopted by the Regulator on its basis.
USAID ESP is ready to continue helping in the effective implementation of REMIT in Ukraine.