Information not publicly available. Since December 2011, the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) has prohibited the use of inside information in trading activities in the European Union (EU) except under certain circumstances. One example of inside information is an unplanned outage that is not yet known about by those outside of an organisation. Market participants usually comply with the rules by publishing the information. REMIT (for physical gas and power) defines inside information as information with the following four elements:
1) it is of a precise nature;
2) it has not been made public;
3) it relates, directly or indirectly, to one or more wholesale energy products; and
4) if it were made public, it would be likely to significantly affect the prices of those wholesale energy products.
Under the EU’s Market Abuse Regulation (MAR) and the FCA Handbook, the definition is slightly different. For commodity derivatives generally, inside information is information of a precise nature, which:
1) is not generally available;
2) relates, directly or indirectly, to one or more such derivatives; and
3) users of markets in which the derivatives are traded would expect to receive in accordance with accepted market practices on those markets.
* see also Market Abuse Directive (MAD), MAD II and Market Abuse Regulation (MAR); Regulation on Wholesale Energy Market Integrity and Transparency (REMIT)
Commodity trading and risk management is a subject that is necessarily complicated, and is becoming more so. The Energy Risk Glossary seeks to disentangle and clarify the jargon by providing definitions of commonly used energy and commodity market terms.
These include definitions related to a variety of underlying energy products, as well as technical terms about the many instruments and benchmarks used by energy market participants.
Many of the most recent terms to have been added to our glossary stem from the actions of regulators since the 2008 global financial crisis. The onset of rules, such as the US Dodd-Frank Act and European Market Infrastructure Regulation, has markedly increased the cost and complexity associated with commodity trading. Perhaps they have also increased the need for a handy reference guide such as this.
The glossary is extensively cross-referenced, making for easy and thorough searches. We hope you find the latest edition of the Energy Risk Glossary to be a useful resource.
More on Regulation
SSM chair also wants to end rule opt-outs that make banks "look stronger than they really are"
Dodd-Frank and Mifid II won't stop market disorder but will penalise hedgers
Floors framework should not overstate risk, says Sweden's bank supervision chief
RBS risk veteran says banking activities pose greater threat
Sign up for Risk.net email alerts
Research chief is sceptical about end of oil indexation in European gas
Mexico's energy reform may lead to closer ties with adjacent US states
Swap dealers playing a guessing game while complying with CFTC rules
Bill Perkins believes rising demand and reduced risk warehousing will create opportunities for natural gas traders: video
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.