What changed between the plenary report and the adopted text

Removed:DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

Added:P9_TA(2024)0116

Changed:on the proposal for a regulation of the European Parliament and of the Council Amending Regulations (EU) No 1227/2011 and (EU) 2019/942 to improveImproving the Union’s protection against market manipulation inon the wholesale energy market

Removed:(COM(2023)0147 – C90050/2023 – 2023/0076(COD))

Added:Committee on Industry, Research and Energy

Added:PE747.031

Added:European Parliament legislative resolution of 29 February 2024 on the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) No 1227/2011 and (EU) 2019/942 to improve the Union’s protection against market manipulation in the wholesale energy market (COM(2023)0147 – C9-0050/2023 – 2023/0076(COD))

7 unchanged paragraphs

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2023)0147),

– having regard to Article 294(2) and Article 194(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90050/2023),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the European Economic and Social Committee of 14 June 2023,

– after consulting the Committee of the Regions,

Added:– having regard to the provisional agreement approved by the committee responsible under Rule 74(4) of its Rules of Procedure and the undertaking given by the Council representative by letter of 20 December 2023 to approve Parliament’s position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

7 unchanged paragraphs

– having regard to Rule 59 of its Rules of Procedure,

– having regard to the opinion of the Committee Economic and Monetary Affairs,

– having regard to the letter from the Committee on Budgets,

– having regard to the report of the Committee on Industry, Research and Energy (A9-0261/2023),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 1

Removed:AMENDMENTS BY THE EUROPEAN PARLIAMENT*

Added:P9_TC1-COD(2023)0076

Removed:to the Commission proposal

Added:Position of the European Parliament adopted at first reading on 29 February 2024 with a view to the adoption of Regulation (EU) 2024/… of the European Parliament and of the Council amending Regulations (EU) No 1227/2011 and (EU) 2019/942 as regards improving the Union’s protection against market manipulation on the wholesale energy market

Removed:---------------------------------------------------------

Added:(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Regulation (EU) 2024/1106.)

Removed:Proposal for a

Removed:REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

Removed:amending Regulations (EU) No 1227/2011 and (EU) 2019/942 to improve the Union’s protection against market manipulation in the wholesale energy market

Removed:(Text with EEA relevance)

Removed:THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Removed:Having regard to the Treaty on the Functioning of the European Union, and in particular Article 194(2) thereof,

Removed:Having regard to the proposal from the European Commission,

Removed:After transmission of the draft legislative act to the national parliaments,

Removed:Having regard to the opinion of the European Economic and Social Committee,

Removed:Having regard to the opinion of the Committee of the Regions,

Removed:Acting in accordance with the ordinary legislative procedure,

Removed:Whereas:

Removed:(1) Open and fair competition in the internal markets for electricity and for gases and ensuring a level playing field for market participants requires integrity and transparency of wholesale energy markets. Regulation (EU) No 1227/2011 of the European Parliament and of the Council establishes a comprehensive framework (‘REMIT’) to achieve this objective. To enhance the public’s trust in functioning energy markets and to protect the Union effectively against ▌market abuse, Regulation (EU) No 1227/2011 should be amended to further increase ▌transparency and strengthen monitoring capacities, thereby contributing to the stabilisation of energy prices and consumer protection, as well as to ensure more effective investigation and enforcement of potential cross-border market abuse cases addressing the shortcomings identified in the current framework.

Removed:(2) Financial instruments, including energy derivatives, traded on energy markets are of increasing importance. Due to the increasingly close interrelation between financial markets and energy wholesale markets, Regulation (EU) No 1227/2011 should be better aligned with the financial market legislation such as Regulation (EU) No 596/2014 of the European Parliament and of the Council, including with respect to the definitions of market manipulation and inside information respectively. More specifically the definition of market manipulation in Regulation (EU) No 1227/2011 should be slightly adjusted to mirror Article 12 of Regulation (EU) No 596/2014. To that end, the definition of market manipulation under Regulation (EU) No 1227/2011 should be adjusted to capture the entering into any transaction, or issuing any order to trade, but also any other behaviour relating to wholesale energy products which: (i) gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of wholesale energy products; (ii) secures, or is likely to secure, by a person, or persons acting in collaboration, the price of one or several wholesale energy products at an artificial level, or (iii) employs a fictitious device or any other form of deception or contrivance which gives, or is likely to give, false or misleading signals regarding the supply of, demand for, or price of wholesale energy products.

Removed:(3) The definition of inside information should also be adjusted to mirror Regulation (EU) 596/2014. In particular, where inside information concerns a process which occurs in stages, each stage of the process as well as the overall process could constitute inside information. An intermediate step in a protracted process may in itself constitute a set of circumstances or an event which exists or where there is a realistic prospect that they will come into existence or occur, on the basis of an overall assessment of the factors existing at the relevant time. However, that notion should not be interpreted as meaning that the magnitude of the effect of that set of circumstances or that event on the prices of the wholesale energy products concerned must be taken into consideration. An intermediate step should be deemed to be inside information if it, by itself, meets the criteria laid down in this Regulation for inside information. The Commission should be able, by means of delegated acts, to further specify the definition of inside information. There should be a contact point at the Agency for market participants seeking clarification on whether specific information would constitute inside information pursuant to Regulation (EU) No 1227/2011 and the relevant delegated acts adopted pursuant thereto.

Removed:(4) This Regulation is without prejudice to Regulations (EU) 596/2014, 600/2014 and 648/2012, and Directive (EU) 2014/65 as well as to the application of European competition law to the practices covered by this Regulation.

Removed:(5) Sharing of information between national regulatory authorities and the national competent financial authorities is a central aspect of cooperation and detection of potential breaches in both the wholesale energy markets and the financial markets. In the light of the exchange of information between competent authorities pursuant to Regulation (EU) 596/2014 at national level, national regulatory authorities should share relevant information they receive with national financial and competition authorities.

Removed:(6) Where information is not, or no longer, sensitive from a commercial or security viewpoint, the European Agency for the Cooperation of Energy Regulators (the ‘Agency’▌) should be able to make that information available to market participants and the wider public in an accessible format with a view to contributing to enhanced market knowledge. This should include the possibility for the Agency to publish information on organised market places, IIPs, RRMs in accordance with applicable data protection law in the interest of improving transparency of wholesale energy markets and provided it does not distort competition on those energy markets.

Removed:(6a) Where information is not, or is no longer, sensitive from a commercial point of view, the Agency should be able to make its commercially non-sensitive trade database available for scientific purposes, subject to confidentiality requirements, with a view to contributing to enhanced market knowledge. This is intended to help to build confidence in the market and to foster the development of knowledge about the functioning of wholesale energy markets. The Agency should establish and make publicly available rules on how it will make the information available for scientific and transparency purposes in a fair and transparent manner.

Removed:(6b) A market participant, as defined in Article 2, point (7), Regulation (EU) No 1227/2011, should be understood to refer to any person, including a transmission system operator, a distribution system operator, a storage system operator and an LNG system operator, who enters into transactions in one or more wholesale energy markets. However, where a distribution system operator, storage system operator and LNG system operator does not enter into a transaction with regard to wholesale energy products, they should become exclusively subject to the relevant publication and disclosure obligations under Article 4 and Article 8(5) of Regulation (EU) No 1227/2011.

Removed:(6c) Market participants should provide the Agency with the data regarding the contracts for the supply of electricity or natural gas and the derivatives related to electricity and natural gas, which may result in an effective physical delivery in the Union.

Removed:(7) Organised market places which carry out activities relating to the trading of wholesale energy products that are financial instruments under Article 4(1)(15) of Directive (EU) 2014/65 shall be duly authorized pursuant to the requirements of that Directive.

Removed:(8) The use of trading technology has evolved significantly in the past decade and is increasingly used on the wholesale energy markets. Many market participants use algorithmic trading and high-frequency algorithmic techniques with minimal or no human intervention. The risks arising from these practises should be addressed under Regulation (EU) No 1227/2011.

Removed:(9) Compliance with the reporting obligations under Regulation (EU) No 1227/2011 and the quality of the data that the Agency receives is of utmost importance to ensure effective monitoring and detection of potential breaches to achieve the objective of Regulation (EU) No 1227/2011. Inconsistencies in the quality, formatting, reliability and cost of trading data have a detrimental effect on transparency, consumer protection and market efficiency. It is essential that the information received by the Agency is accurate and complete for it to effectively carry out its tasks and functions. The Agency should in turn contribute to the establishment of a common Union energy data strategy.

Removed:(10) To improve the Agency’s market monitoring and make data collection more complete, the current reporting regime needs improvement. The data collected should be expanded to overcome gaps in the data collection and include coupled markets, new balancing markets, contracts for balancing markets, explicitly and implicitly allocated transmission capacity, and products that have potential delivery in the Union. Organised market places should be required to provide the full order book data set to the Agency. ▌

Removed:(11) Inside Information Platforms (IIPs) should play an important role for the effective and timely publication of inside information. It should be mandatory for market participants to disclose inside information on dedicated IIPs to make the information easily accessible and enhance transparency. Market participants may, only in addition, continue to use other channels, including market participants' websites, to disclose the inside information, provided that equal conditions on timelines and accessibility are ensured. To ensure trust in the IIPs they should be authorised and registered, and the Agency’s supervisory powers over IIPs should be extended to include the power to impose fines and periodic penalty payments and to issue public notices. However, market participants should not be held responsible or liable with respect to the obligation to disclose inside information, in the case of temporary technical problems of duly registered and authorised IIPs or for any publication error caused by the IIP, provided that the information was transmitted to the IIP in time and using the requisite format.

Removed:(12) To streamline and make the reporting of data to the Agency more effective, the information should be provided through Registered Reporting Mechanisms (RRMs) and the operation of RRMs should be authorised by the Agency. The RRMs should at all times comply with the conditions for authorisation and data protection law. The Agency should also establish a register of all RRMs in the Union. The Agency should have the power to withdraw such authorisation in certain cases. The Agency's supervisory powers over RRMs should be extended to include the power to impose fines and periodic penalty payments and to issue public notices.

Removed:(13) In order to facilitate monitoring to detect potential trading based on inside information and data quality of collected information, the collection of inside information needs to be aligned with the current processes for trade data reporting.

Removed:(13a) The reporting obligations on market participants should be minimised by collecting the required information or parts thereof from existing sources where possible.

Removed:(14) Persons professionally arranging and executing transactions have the obligation to report suspicious transactions in breach of the provisions on insider trading and market manipulation. To enhance the possibility of enforcement of such breaches, the persons professionally arranging transactions should also have the obligation to report suspicious orders and potential breaches of the obligation to publish inside information. Direct electronic access providers, where they are not providing arrangement services to third parties, and shared order-book providers should not be considered to be persons professionally arranging transactions.

Removed:(15) Commission Regulation (EU) 2015/1222 establishing a guideline on capacity allocation and congestion management foresees the possibility of third country participation in the Union single day-ahead and intraday coupling in the electricity sector. Since the market coupling operator uses a specific algorithm to match bids and offers in an optimal manner, this may result in orders to trade being placed in a third country participating in the Union single day-ahead and intraday coupling but resulting in a contract for the supply of electricity with delivery in the Union. The placing of such orders to trade in third countries participating in the Union single day-ahead and intraday coupling that may result in delivery in the Union should be covered by the definition of wholesale energy product pursuant to this Regulation.

Removed:(16) In order to obtain an accurate, objective and reliable assessment of the price for LNG deliveries to the Union, the Agency should collect all the relevant LNG market data that are necessary to establish a daily LNG price assessment and benchmark. The price assessment and benchmark should be undertaken based on all transactions pertaining to relevant LNG deliveries into the Union. The Agency should be empowered to collect this market data from all participants active in LNG deliveries into the Union. All such participants should be obliged to report a record of their LNG market data to the Agency. Once established, the LNG price assessment and the ▌benchmark could also become a reference rate for derivatives contracts used for hedging the price of LNG or the difference in price between the LNG price and other gas prices. The Agency should minimise the burden imposed on LNG market participants by optimising the collection process of the relevant data through the existing sources and reporting mechanisms in place under Regulation (EU) No 1227/2011. Where the Agency finds that an LNG market participant has not submitted the required information, it should be able to impose fines or periodic penalty payments.