This week ANRE, the Romanian energy regulator, followed up on their record-setting REMIT fines announced in February (click here) by announcing (click here) another three individual (but related) fines totalling RON 18,005,844 (c.EUR 3,615,100) for alleged pre-arranged trading in power contracts in violation of Article 5 of REMIT.
The activity again took place on the OPCOM Centralized Market, the same venue as for the February enforcement action for wash trading.
ANRE does not provide a significant amount of detail in relation to the specific actions which led to the fines. Below is a summary based on what can be gleaned from ANRE’s announcement:
- Three companies were involved in the enforcement actions namely Energy Republic Trading SRL, QMB Energ SRL and Land Power SRL;
- Energy Republic Trading SRL was found to have engaged in four transactions in total with QMB Energ SRL and Land Power SRL which were considered to be pre-arranged trading;
- QMB Energ SRL was found to have engaged in three transactions with Energy Republic Trading SRL which were considered to be pre-arranged trading;
- Land Power SRL was found to have engaged in one transaction with Energy Republic Trading SRL which was considered to be pre-arranged trading;
- The following fines were announced for each entity:
- Energy Republic Trading SRL: RON 6,336,705 (c.EUR 1,272,254)
- QMB Energ SRL: RON 3,933,081 (c.EUR 789,666)
- Land Power SRL: RON 7,736,057 (c.EUR 1,553,210)
- There is no detail provided which explains the disparity in fines – particularly given Land Power only engaged in a single transaction that was deemed abusive;
- An extract from the announcement seems to indicate the ACER played a role in identifying the suspicious behaviour and raising it to ANRE’s attention via OPCOM, “This measure comes as a result of some investigative actions carried out by ANRE, upon notification to OPCOM made through the ACER Notification”.”latform
RegTrail Insights
ANRE’s latest round of enforcement is likely to be interpreted as heavy-handed by many in the market and is bound to cause many trading organisations to re-evaluate the benefits of participating in this market versus the risk of being on the receiving end of fines of this magnitude.
Somewhat frustratingly ANRE do not provide sufficient detail to allow market participants to learn form and adjust their behaviours accordingly. As for the wash trading cases in February, the low number of transactions involved are noteworthy, and likely of concern to those active in this market.