EFETnet's plans for Market Abuse Regulation (MAR)
Market Abuse Regulation (MAR) came into force on 3rd July this year. To be MAR-compliant, all trading companies have to monitor their trading activity in order to prevent and detect market abuse, and to report suspected market abuse to the competent authorities. Whilst MAR is originally a financial market regulation package, it also impacts trading of physical products.
EFET has created two work groups to assist its members working on their response to MAR: the Trading Compliance WG, under the Legal Committee, focuses on providing policy guidance to members, while the MAR Operations and IT WG is working on an industry standard for the process, data and IT aspects of MAR compliance. This standardisation effort will focus on defining the requirements for filters and triggers to detect abuse patterns, as well as the related data requirements including the sourcing and collection of the required market data. The standards are planned to be used as requirements for input to each company’s automated trade monitoring solution implemented in support of their overall MAR compliance process.
Some companies trading power and natural gas in Europe have already put in place the required “arrangements, systems and procedures“ for MAR trade monitoring. Other trading companies are still establishing the requirements for MAR compliance “appropriate and proportionate in relation to the scale, size and nature of their business activity”. After having established their requirements, a few companies have started RfQ processes or are in the midst of a make-or-buy decisions. If your company has not yet committed to a MAR approach, you should be aware that EFETnet is prepared to leverage the work already done for REMIT and EMIR data collection, further building upon the work of the two EFET MAR work groups.
EFETnet already reports under EMIR to the three leading EMIR Trade Repositories and under REMIT to ACER for over 1000 EU energy trading organisations. For REMIT, EFETnet collects order and transaction data for the EU electricity and gas markets from most EU trading venues, both brokers and exchanges. EFETnet is closely monitoring the work of the MAR Operations & IT WG with the intention of developing a trade monitoring service for MAR, reusing REMIT and EMIR data for those users who wish to participate. Ideally, such electronic Trade Monitoring (eTM) service would work entirely based on EMIR and REMIT data already collected, with no local IT integration project required beyond that.
Please contact email@example.com if you would like to stay informed about EFETnet’s plans for MAR, or if you have questions.