Finding that Engie Global Markets has breached Article 5 (prohibition on market manipulation) of Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (‘REMIT’)

Opened:
Sep 2019
Closed:
Sep 2019
Regulation Area:
REMIT
Breach Area:
Market manipulation

1. The Gas and Electricity Markets Authority (‘the Authority’) takes breaches of REMIT very seriously. It is important to ensure that energy consumers and market participants have confidence in the integrity of energy markets, that prices set on the wholesale energy markets reflect a fair and competitive interplay between supply and demand and that no profits can be drawn from market abuse.

2. The Authority is satisfied that Engie Global Markets of 1 Place Samuel de Champlain, 92400 Courbevoie, France, incorporated and registered in France with company number 437 982 937 (‘EGM’), has breached Article 5 of REMIT*. Article 5 provides that “any engagement in, or attempt to engage in, market manipulation on wholesale energy markets shall be prohibited”.

3. The Authority found that between the period 1 June 2016 and 31 August 2016 a trader working in the name, and on behalf, of EGM, contravened Article 5 on a number of occasions. EGM is liable for this breach.

4. The Authority found that EGM engaged in market manipulation in relation to the month ahead contract for the delivery of natural gas at the National Balancing Point on the Over-the-counter wholesale energy market. Transactions or orders were issued that gave, or were likely to give, false or misleading signals as to the supply of, or demand for, or price of wholesale energy products or that secured or were likely to secure the price of wholesale energy products at an artificial level.

5. Mindful of its principal objective, to protect consumers, its enforcement obligations under REMIT and the need to ensure the integrity of the electricity and gas wholesale markets, the Authority considered it appropriate to impose a level 3 sanction. This resulted in a financial penalty of £2,985,630.00 on EGM in respect of its contraventions of Article 5.

6. In determining the financial penalty, the Authority noted EGM’s cooperation with the investigation and considered the relevant aggravating and mitigating factors, including the measures that EGM put in place subsequent to the breach to prevent such a breach recurring.

7. Recognising that EGM has admitted that it has breached Article 5 of REMIT and has agreed to settle this matter during the early settlement window, the Authority discounted the penalty by 30% in accordance with its REMIT Penalties Statement published on 23 June 2015. Accordingly, the Authority considered that it was appropriate to reduce the financial penalty due from EGM in respect of the contraventions of Article 5 to £2,128,236.00.

Dated: 5 September 2019

Gas and Electricity Markets Authority

* OJ No L 326, 08.12.2011, p1.