PPAT (Persons Professionally Arranging Transactions): what is it?

For persons professionally arranging transactions on the wholesale energy markets, or PPAT (Persons Professionally Arranging Transactions), Article 15 of the European REMIT Regulation provides for two types of obligations.

ACER, the European Agency for the Cooperation of Energy Regulators, clarified the definition of PPAT in chapter 9 of the 4th edition of its guidelines. Thus, exchanges, brokers and transmission system operators (TSOs) are considered as PPATs insofar as they play an intermediary role in carrying out transactions on wholesale energy markets. In particular, TSOs have an important role in market mechanisms related to balancing the power system (balancing mechanism, primary reserve management, etc.).

The obligation to report suspicions

Under section 15 of REMIT, PPATs are required to notify the regulator “without delay” when they have reason to suspect that an energy trading may constitute a breach of the prohibitions on insider energy trading or market manipulation (sections 3 and 5 of REMIT).

ACER’s guidelines specify that regulators consider it good practice to report suspicions within four weeks of the event concerned.

They detail the information that a Suspicious Transaction Report (STR), when available, should provide, such as the type of market abuse, details of the reporting entity, description of the potential breach, identification of the entity that has potentially breached the REMIT regulation, etc. The ACER guidelines specify that the regulators consider it good practice to report suspicions within four weeks of the event concerned.

They also indicate the criteria for determining the energy regulator(s) to which the STR should be addressed. The PPAT must make a notification at least to the national regulatory authorities (NRAs):

the Member State(s) where the wholesale energy product was delivered ;
the Member State where the market player in question has registered.
If more than one NRA is concerned, PPAT must send a STR to each of them. In order to inform each NRA of the multiple nature of the notification, these STRs must include a list of the NRAs to which the notification is addressed.

STRs may be sent via the notification platform made available by ACER. Via this platform, PPATs may send an STR to several NRAs simultaneously.

The obligation to establish and maintain effective procedures to detect breaches of Articles 3 and 5 of Remit
Article 15 of REMIT requires PPATs to establish effective procedures to detect breaches of Articles 3 and 5 of REMIT. PPATs must actively monitor the wholesale energy markets in which they are involved.

Section 9.4 of the ACER guidelines details these obligations:

examples of monitoring methods that can be used to ensure compliance with Section 15 of REMIT;
proposed solutions and examples of governance structures to avoid conflicts of interest that may arise;
indications on the appropriate level of resources dedicated to monitoring, from both a quantitative and qualitative point of view;
examples of potentially virtuous procedures, including communication and traceability.

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