Market participants who want to arrange energy trades with or to EU member states will have to register with those states’ national regulators in the event of a ‘no deal’ Brexit, Ofgem has confirmed – but they cannot act now to get ahead of the process.
The regulator added, “We understand that the process for re-registration with an EU NRA will be determined and communicated by ACER in due course.” It said participants should initiate the re-registration process, consistent with ACER’s guidance, as soon as possible – but not until after it had been confirmed that there would be a ‘no-deal’ Brexit.
It is not clear how long it will take participants to register in other states. New Power has heard in the past that it could take six months for participants in financial markets to be licensed by appropriate regulators. But energy market trades may be treated differently and ACER may make special arrangements, given the circumstances.
That is the case in GB. As regards trade within this market, Ofgem said it will have responsibility to monitor, investigate and enforce breaches of integrity and transparency. Market participants entering into transactions, or placing orders to trade, in wholesale energy products where delivery is in GB, will be required to register with Ofgem within four weeks of exit. But Ofgem plans to issue a direction before 27 April that will allow it to unilaterally recognise participants registered with the Northern Ireland regulator or a National Regulatory Authority (NRA) of an EU Member State.
The regulator said UK financial regulators had confirmed that energy trades, overseen under Remit, would continue to be ‘carved out’ from other financial product trading, so they are not doubly regulated under Mifid and Remit.
Ofgem added, “We are keen for stakeholders to discuss with us their understanding of our contingency plans, their own contingency plans and raise any concerns they have with us. Feedback to this letter should be sent by e-mail to Ofgem’s REMIT registration inbox REMIT.Registration@ofgem.gov.uk.”
Participants who wish to register with Ofgem for the first time, and existing Ofgem registered MPs, who wish to edit or amend their registrations, should contact Ofgem.