Italian Regulator Fines Swiss Firm for REMIT Breach

• EC Energy Clean SA (EC Energy) is a Swiss-based company that failed to register as a Market Participant under Article 9 of REMIT;
• The case was raised to ARERA on 27 December 2022 via a Suspicious Transaction Report submitted to ACER indicating that EC Energy had been active in the Italian day ahead and intraday gas markets managed by Gestore dei Mercati Energetici (GME) between 27 October 2020 and 27 December 2022 without being registered in the Italian national REMIT Register nor in the that of any other EU member state;
• EC Energy was also found not to have fulfilled its obligations to report transactions to ACER carried out on wholesale energy markets in breach of Articles 8 of REMIT over this period;
• EC Energy then subsequently registered in the REMIT Register on 17 February 2023, after more than two years of trading operations, then despite signing up to Equias for reporting services, had not commenced REMIT reporting at the time a virtual hearing with ARERA was held on 15 May 2023.

ARERA’s 11-page resolution (which is in Italian) does not add much new information to the original notification on the case. EC Energy’s defence (covered by paragraphs 14 – 21) are mostly couched in the contention that they did not commit any market abuse and had generally acted in good faith rendering the breaches less serious. They also requested confidentiality in their response to the preliminary findings.

ARERA was scathing in its response with the following extract from the order,  "..the company's appeal to trust in the lawfulness of the conduct and in good faith is devoid of any foundation…” and “…a professional operator should have known the regulatory provisions whose non-compliance with is contested (articles 8 and 9 of the REMIT) which were also completely clear and intelligible in their content and therefore could not reasonably generate any doubt about their scope."

EC Energy were fined a total of EUR 25,000 of which EUR 13,000 was for the violation of the Article 8 of the REMIT and EUR 12,000 was for the violation of the Article 9.

 RegTrail Insights

As noted when first announced in August 2023, the case provides an interesting third country test case (EC Energy being Swiss-based). While the firm did not endear itself to ARERA though continued non-compliance with REMIT reporting rules even after their formal hearing with the regulator, the EUR 25,000 penalty will hardly be seen as a strong deterrent by many.