ACM warns large international energy producer about insufficient disclosure of inside information
Summary
- ACM has issued an official warning to a large energy producer for not publishing inside information correctly and on time.
- Disclosing inside information late, incorrectly, or not at all can harm the process of fair price formation on the wholesale markets, and can undermine the confidence in markets.
- ACM has tightened its oversight over the company, and keeps a close watch on whether the company implements the necessary improvements.
The Netherlands Authority for Consumers and Markets (ACM) has issued an official warning to an international energy producer and trader for not disclosing inside information correctly and on time. The company’s executives have immediately committed to implementing the necessary measures within the organization to prevent repeat occurrences. As a result thereof, ACM has decided not to continue the investigation into the company at this time. ACM tightened its oversight over the company, and keeps a close watch on whether the company implements the necessary improvements. If ACM sees insufficient improvements, it may impose a fine on the company.
As the owner of its electricity production locations, the international energy producer has information regarding ramping up or ramping down these production locations. The available production capacity at a given time affects the energy supply, and information about that can affect the price formation on the wholesale energy market. To ensure that this type of information is available to all market participants, energy producers are statutorily required to disclose such inside information correctly and on time. When inside information is disclosed late, incorrectly, or not at all, it increases the risk of insider trading. This can disrupt the process of fair price formation on wholesale energy markets, and it undermines the confidence in the market. That is why ACM takes action against this.
Manon Leijten, Member of the Board of ACM, explains: “Market participants must be able to rely on price-sensitive information being available to everyone at the same time. That’s why ACM sees to it that businesses that operate on the wholesale markets for energy act in an honest and transparent manner. This is important, especially now, in a period of geopolitical uncertainty and high energy prices for households and businesses.”
ACM’s oversight
AMC periodically checks whether businesses comply with the rules regarding publishing inside information. During these periodic checks, ACM found that the company did not sufficiently comply with the rules regarding publishing inside information. ACM has also received reports from the sector. ACM confronted the company about this, and tightened its oversight over the company. In response, the company immediately committed to taking measures.
On the European wholesale energy markets, insider trading and market manipulation are prohibited under the REMIT regulation. All market participants in Europe are statutorily required to comply with these rules. One of these obligations is that market participants must disclose important information. ACM enforces compliance with these rules, and, in those efforts, works together with the Dutch Authority for the Financial Markets (AFM), the European Agency for the Cooperation of Energy Regulators (ACER), and other European energy regulators.
See also
Inside knowledge on energy markets (in Dutch)
Indicators of ACM’s regulatory activities under REMIT (in Dutch)