The European Commission will put forward on 8 December a proposal for regulation on energy market integrity and transparency. The purpose of the regulation will be to increase transparency on wholesale energy markets and prevent the occurence of market abuse in the form of insider trading and market manipulation. This will entail the adoption of harmonisation measures in the form of standards and oversight mechanisms. According to the European Commission, the adoption of a new regulation is justified because 'important segments of wholesale energy markets are not covered by clear rules prohibiting market abuse that makes prices higher than they should be.'
The Commission takes as overall objective to increase transparency on the wholesale electricity and gas markets for the benefits of competition and of final customers, which will in particular benefit from more transparent retail price fixing mechanisms. This has become a relevant issue for the Commission as markets become more complex and actors more diversified (utilities, traders, financial institutions and the like). The Commission sees also a clear benefit in terms of signals for future investments in energy infrastructure, another major concern of EU energy policy for the moment. Finally, the Commission founds the proposal necessary as the third liberalisation package did not address the shortcomings of market integration at this level. It goes together with the announced policy objective to reinforce energy customer protection.
The proposal has taken into account the conclusions of a report drafted by the Committee of European Securities Regulators (CESR) and the European Regulator's Group for Electricity and Gas (ERGEG) and published in January 2009, as well as from the results from a consultation exercise held in 2010 and available here.
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