Nord Pool gives a high priority to ensuring the transparency and integrity of the market we operate, for the benefit of all market participants. The Market Surveillance team works daily detecting suspicious activity and acting to prevent market manipulation or insider trading.
Nord Pool has a dedicated department comprising market surveillance experts, whose role is detecting, analysing and reporting any suspect market activity. Based on regulatory guidance, any suspicious activity must be detected and reported in a timely fashion, to the responsible National Regulatory Authorities (NRAs) and ACER (the Agency for Cooperation of Energy Regulators). To ensure this, Nord Pool has implemented arrangements and procedures to detect any potential cases of market manipulation or insider trading.
These arrangements and procedures are based on risk assessment of the markets that Nord Pool operates. The Market Surveillance team starts by identifying all different types of market manipulation or insider trading that may occur, estimates the likelihood and consequences of such activities and ensures that the identified risk areas are covered by specially developed automated tools and/or specific checks. Examples of risk areas that the team especially focuses on include generation capacity withholding in the day-ahead market, or transmission capacity hoarding in the intraday. All procedures are reviewed, updated and adjusted as necessary - at least annually. Regular audits are performed to make sure that monitoring arrangements remain fully effective.
Advising and clarifying
In addition to monitoring activity, the Market Surveillance team regularly meets market participants and NRAs, provides advice on specific trading practices, as well as organizing courses and workshops related to market integrity and transparency. One direction of this work is to clarify grey areas in regulatory guidance, whenever that is possible and to align the understanding of all interested stakeholders. Market Surveillance is also active in providing the team’s views on market design, with a view to ensuring transparency and integrity, now and for the future.
Market Surveillance in the European setting
Market Surveillance at Nord Pool is an important first line of defence when it comes to detecting and reporting suspicious activity. REMIT (the Regulation for wholesale Energy Market Integrity and Transparency) formulates the legal responsibility for power exchanges to establish and maintain a market surveillance function. This is true also in the multi-NEMO setup, where several power exchanges may be operational in the same country. Cases reported by power exchanges are investigated and finalised by the responsible NRA(s). It is often the case that the exact timelines and procedures involved in pursuing and/or prosecuting potential market manipulation and insider trading is dependent on relevant national legislation.
ACER performs monitoring at the European level, also reporting suspicious cases to the NRAs. ACER further contributes to the monitoring process by issuing guidance (https://www.acer.europa.eu/remit/about-remit/remit-guidance), that is commonly used by NRAs, but also market monitoring teams.
Notifying suspicious activity
Nord Pool notifies the authorities based on alerts generated by its dedicated internal monitoring systems, ad-hoc analysis, or any outlier events that attract the scrutiny of our market surveillance experts.
To achieve this, the Market Surveillance team welcomes input from market participants and any other interested individuals. For questions or tips regarding irregular trading behaviour, please contact: email@example.com. All correspondence is handled in strict confidence.
Guidance and education
Nord Pool’s Market Surveillance team is active in providing guidance to market participants, as well as educating third parties about the team’s mission and tasks:
Market Surveillance – what we do:
Transmission capacity hoarding – what it is and what constitutes manipulative practice:
- Introduction to capacity hoarding https://youtu.be/FanPjnQ8RvE
- Detailed example https://youtu.be/sGwZd8QEXUE
Please note that after activation your data will be forwarded to YouTube.
Quarterly newsletters on relevant topics, including how cases are investigated, previous years’ statistics, and the team’s view on specific trading practices:
Market Surveillance and market participants’ reports on regulatory subjects:
- REMIT Best Practice: sector review on how to comply with REMIT for market participants: https://www.nordpoolgroup.com/en/services/compliance/remit-best-practice/
- Inside Information Threshold report – qualitative and quantitative study looking into an appropriate threshold for publishing inside information: https://www.nordpoolgroup.com/en/trading/Market-surveillance/expert-reports/
If you have any questions or comments concerning market surveillance in the power sector, do not hesitate to contact Nord Pool’s Market Surveillance team: firstname.lastname@example.org.