On the 18^th of March 2024 the Council of the EU approved amendments to the Regulation on Wholesale Energy Market Integrity and Transparency (Regulation (EU) No 1227/2011, REMIT). The new regulation also amends the ACER establishment Regulation (Regulation (EU) 2019/942).

The main changes to REMIT are as follows:

Market participants who use algorithmic trading (submission of orders which parameters such as price and quantity are determined with limited or zero human intervention) should notify the national regulatory authority in the country in which they are registered - for example EWRC for Bulgaria. They shall take measures to ensure that they have effective and risk control systems including to prevent sending of erroneous orders or causing market disturbances.

Regarding LNG, the European Union Agency for the Cooperation of Energy Regulators (ACER) will collect all LNG market data that are necessary to establish a LNG price assessment (daily reference price), and LNG benchmark (spread established in comparison to other reference prices on the market).

A number of definitions have been changed, including those who stands for inside information and market manipulation. The requirements for reporting transactions and orders (Art. 8 of REMIT) are extended. They will also include data on market participants' exposure, detailed by product, including OTC transactions.

Stricter requirements for market participants in the EU who are resident in a third country  are established. They will have to designate a representative in a member state in which the market participants are active on the wholesale energy market. The representative must be designated by a written mandate and authorised to act on behalf of the market participant. This provision of Art 9 shall apply six months from the date of entry into force of the new regulation.

The new regulation gives ACER the right to investigate cases with a cross-border dimension in case at least two Member States are affected.

The national regulatory authorities will be able to object the exercise of ACER's investigative powers if they have already been formally initiated an investigation based on the same facts or if the investigation has ended without finding an infringement. Regulators will have a maximum of 3 months to object.

The regulation introduces new tools at disposal of ACER to use for conducting investigations. The agency will be able to carry out on-site inspections, issue requests for information and it will be authorised to take statements from market participants or other persons. On-site inspections, where officials have the right to seize documentation and seal premises, will be carried out after a decision of ACER. This decision is consulted with the national regulatory authority concerned and may be subject to review by the Court of Justice of the European Union. Under certain conditions, the agency can carry out on-site inspections in private premises.

In addition, ACER will be able to take decisions regarding authorizations or withdrawal of authorisations of inside information platforms and registered reporting mechanisms.

ACER will have the power to impose periodic penalty payments in order to ensure compliance with on-site inspection decisions and requests for information.

The power to impose sanctions for infringements or breaches of the prohibitions or substantive obligations included in the (Regulation (EU) No 1227/2011 will remain under the authority of the member states. But rules are being put in place to ensure harmonisation of sanctions and to specify criteria for their determination are detailed - for example, profits gained or losses avoided by the offender. The maximum amount of sanctions for breaches of Art. 3 and/or 5 of the regulation can reach up to 15% of the annual turnover for the previous financial year.

The regulation will come into force 20 days after its publication in the Official Journal of the EU. After that its provisions will be directly applicable in Bulgaria. Individual provisions, such as the licensing of inside information platforms and registered reporting mechanisms, will come into force at later dates.

The changes to REMIT, which have been proposed by the European Commission on the 14th of March, 2023, are part of a wider reform of the design of the EU electricity market.