Energiavirasto (EV), the Finnish energy regulator, has announced further developments in its “market surveillance practices” under REMIT. EV acknowledge the central role that ACER plays in market surveillance but also the need to perform monitoring at a national level, an increasingly common practice amongst national regulatory authorities.
As part of the development, they announced the introduction of a new approach to supervision involving the issuing of a “control letter” reserved for instances where minor infringements occur due to error, but which prove to be inconsequential to the market and do not warrant formal sanctions. Control letters, which are not legally binding, will be sent to market participants without being made public.
Striking a benevolent tone, EV notes that not all inquiries they send to wholesale market participants necessarily represent suspicion of abusive behaviour but rather indicate the need for clarification on complex trading topics. They also note however that this does not prevent them from using such information for enforcement purposes, particularly where trading errors have caused a significant market impacts.
Firms are reminded that fat-finger errors impacting the market may be considered abusive under REMIT. Market participants will undoubtedly appreciate the softer approach taken by EV but should continue to ensure that appropriate pre-trade controls are implemented where possible and Front Office is aware that order entry errors, be they for auctions or continuous markets, are likely to attract regulatory attention and, if severe, can also result in sanctions.