Transcript REMIT Implementation in DONG Energy

REMIT Implementation in DONG Energy
DERA Seminar, 27 April 2012
Marie-Louise Piil Christensen
Agenda
1. Challenges in relation to REMIT Implementation
2. Overall Approach in DE
3. Insider Trading Policy – Main content
4. What have we done – step by step
5. Outstanding issues to be clarified by ACER/Regulatory Authorities
6. Next steps
REMIT Implementation – Main Challenges
Main Challenges:
1) Short time frame for implementation
2) Framework Regulation => Broad
and vague wording => Grey areas
and uncertainty e.g. in relation to
definitions
REMIT Regulation came
into force across Europe
on 28 December 2011
3) Numerous requirements in order to
be compliant
4) Change of "Culture" in some areas
of the energy sector
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Overall
Approach
Internal
Approach
• Follow ACER Guidelines to Regulatory
authorities from December 2011
• Implementation aligned with other energy
companies in DK/EU and recommendations
from industry associations
• Continuous dialogue with DERA
• Second phase - Reporting – difficult to set up
IT systems etc. due to uncertainty in relation
to e.g. format, level of details etc.
• Implementation Process initiated in beginning
of October 2011 as soon as final REMIT text
was available
• Implementation finalized by end of Q1 2012
• Internal controlling procedure will be initiated
by end of Q2
'REMIT' Implementation
Overview/Elements/Hierarchies
Overall Compliance Officer (Legal)
Responsible for establishing the overall general
guidelines and procedures in cooperation with the
different Business Units
Business Unit
Compliance
Officer for
EM
Business Unit
Compliance
Officer for
POWER
Business Unit
Compliance
Officer for
E&P
Business Unit
Compliance
Officer for
S&D
Business Unit
Compliance
Officer for
REN
Responsible for the practical implementation on BU level and
compliance
Business Unit
Compliance
Officer for
GTRM
Insider Trading Policy
Contains general guidelines for the handling of inside information and other
precautions and procedures necessary to ensure DE's compliance with new and
existing insider rules
Insider Rules
Market Abuse Directive
(MAD)
REMIT
Power & Gas Products
Financial Instruments
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Insider Trading Policy
MAIN CONTENT
Description on primary obligations and
prohibitions, e.g. against insider trading
General information on REMIT + MAD
All directors, managers and employees
Who are covered?
What is covered?
Power + gas, transport agreements and
related derivatives + financial instruments
Establishment of Chinese Walls
Production and trading separated (physically,
IT systems etc.)
Insider lists
All employees with inside information are
listed on an insider list
Procedures for handling of inside
information
Inside information may not be shared with
anyone until published to the market
Publication of inside information
Insider information is published on our
websites immediately or ASAP
Sanctions
Not yet known, but probably fines and
imprisonment (+ bad publicity)
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Implementation Process – Step by Step I
Internally in DE
Deployment of overall DE Insider Trading
Policy
Has been published on the Intranet in a
Danish and English version + sent out to all
relevant employees
Preperation of Insider Trading Policy for
external consultants
Used when DE engage external
consultants, e.g. external lawyers,
auditors etc.
Short section on handling of inside info
and market abuse rules in overall DE
Compliance Program
Mandatory – Will be rolled out to all DE
employees
Development of e-learning programs
Short case in overall compliance program
and more detailed REMIT specific
program for relevant employees
Publication meassures
DE Websites and in the future also
Energinet.dk
Info meetings and educational sessions
for relevant employees
Has been carried out for all relevant
employees in DK and abroad.
8
Implementation Process – Step by Step II
Internally in DE
Establishment of Insider lists
Centrally managed by HR
Compliance Officers have been
appointed in all departments
Bi-weekly meetings have been held with
these regarding the implementation
process
Specific written procedures for handling
of inside information etc.
Have been made and distributed in all
departments
Establishment of overall DE Compliance
Log
And department specific Compliance Logs
Participation in working groups and
industry organisations
To ensure that DE's implementation level
is aligned with level in other EU countries
and available recommendations
Registration of DE as Energy Trader with
Energitilsynet
Postponed until mid 2012
Participate in DERA Working Groups
(at present WGs on Upstream)
On-going
9
'DE Register book' – The framework of implementation
10
Outstanding issues to be clarified by authorities
Definition of Inside Information still
unclear
Primarily in relation to thresholds on gas,
"precise nature" and "any other information"
Identification of the markets relevant for
compliance of the Regulation
Power, gas, balancing markets etc. –
European, National or even more local?
Hedging exemption clarification
Intention and relevance of "unable to meet
contractual obligations" condition
Publication of availability
Is this technical or commercial availability
Publication Platforms
There should be one European or
National Website, where all inside info
must be published
LNG
LNG storage is covered by the Regulation
– what about LNG Trading?
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Next Steps in the REMIT Implementation Process
On going follow-up and monitoring of compliance
Necessary adaptions of internal policies based on coming ACER Guidelines
Registration of DE as Energy Trader with DERA - probably earliest mid 2012
Level II – Reporting Obligation
• Expected to come into force mid 2013
• Details on the reporting obligation still lacking
• Energy companies in EU currently awaiting further details/guidelines
• Internal implementation process expected to last at least 12 months