CEER Final Advice on the Introduction of a Europe-wide Energy Wholesale Trading Passport
A CEER Conclusions Paper
Scope of a regulatory access regime to wholesale energy trading
Based on the outcome of the public consultation CEER concludes that there are objective reasons for regulating the access to trading on electricity and gas wholesale markets. Its focus shall be to ensure that certain requirements for the companies participating in wholesale energy trading are in place in order to contribute to keeping fraudsters at bay and to ensure that all market participants are known to the regulators. Furthermore, it should be clarified that the advice focuses on regulatory issues, and additional requirements for network access or starting trading activities related to TSOs or trading venues (such as energy exchanges) are not in the scope of this document.
Requirements, non-requirements and administrative standardsCEER proposes the following requirements and administrative standards for a wholesale energy market access regime:- All trading companies active in the market should be known, including some basic information, such as the name of the company and field of activity;
- Persons effectively running the trading company should be obliged to provide certain information, for example their criminal record;
- If there is a fee for obtaining a trading license, this should be cost-based;
- The application procedure and its maximum duration should be Europe-wide standardised;
- Trading companies should demonstrate their technical, financial and organisational capacity to fulfil all energy regulatory guidelines.
The following shall not to be required: any provisions related to security of supply; specifying or requesting collateral; checking the potential economic success of applicants; or requiring the existence of a branch office in host countries outside the state which has issued the trading passport.
Implementation optionsThis advice discusses possible options regarding the appropriate organisational framework which ensure the proper implementation of the requirements and standards listed above. The six options discussed are:- to continue with the status quo;
- to extend the existing MiFID (Markets in Financial Instruments Directive) passport to electricity and gas trading;
- to set certain minimum and maximum requirements for national licensing regimes;
- to introduce a registration and no national licenses;
- to prohibit wholesale energy trading licensing regimes in the EU;
- to introduce a Europe-wide Energy Wholesale Trading Passport instead of having different national licenses.
The options were evaluated against the background that a future regime should ensure a level playing field for market participants, provide an appropriate level of checks, identify all market participants and avoid unnecessary bureaucracy.
Summary of the evaluation of the implementation options for a regulatory access regime to wholesale energy trading
Based on these criteria, CEER concludes that a Europe-wide Energy Wholesale Trading Passport would be the best policy option to fulfil all goals. All other options have deficits in one or the other dimension. The big benefit of the Europe-wide energy wholesale trading passport is that each trading company would need to apply for such a passport only once in one EU Member State and could then use this passport in all European wholesale energy markets.