SEMOpx Market Surveillance - Trading Behaviour in M7

Affected Period

Status
Closed

Category
SEMOpx

Run type

Created
30/09/2022 15:26

Last Updated
30/09/2022 16:00

Dear SEMOpx Members,

SEMOpx, the SEMOpx Market Surveillance Unit and the Market Monitoring Unit (MMU) have been investigating trading behaviour on the Intraday Continuous M7 platform which is suspected to have breached the Exchange rules relating to market conduct and behaviour.

Specifically, certain members are suspected of breaching the following legislation and/or rules:

  • Regulation (EU) 1227/2011 (REMIT) Article 5, which prohibits any engagement in, or attempt to engage in, market manipulation; and
  • SEMOpx Market Rules section D 1.2 (Market Conduct, Monitoring and Surveillance – Principles)

A number of members have engaged in a strategy of bidding behaviour which we believe to be deceptive and misleading to the Market.

An example of the type of trading strategy is outlined below, whereby the Bid Price shadows the Ask price with a negative bid. The Bid Price is intentionally chosen so as to appear close to the Ask Price, but relies on an Exchange Member not noticing that the bid is negative until after the trade is concluded. We do not see this as commercially viable or in line with Exchange rules relating to loyal, honest, transparent and professional good practice.

Order ID

Time stamp

BQty (MW)

Bid Price (€/MWh)

Ask Price (€/MWh)

AQty (MW)

Spread (€/MWh)

Example Data

08H2

10

430

450

10

20

Example Data

09H1

10

430

450

10

20

Example Data

09H2

10

-430

450

10

880

Example Data

10H1

10

-525

550

10

1075

Example Data

10H2

10

-525

550

10

1075

Example Data

11H1

10

525

550

10

25

Example Data

11H2

10

525

550

10

25


We have engaged with the members on this trading behaviour.   SEMOpx, the SEMOpx Market Surveillance Unit and the MMU would like to take this opportunity to formally state to all SEMOpx Members that this this type of trading activity is not appropriate in SEMOpx markets. This behaviour has been flagged, and will be reported to REMIT.

It is the joint responsibility of SEMOpx and Exchange Members to ensure a fair and transparent energy market, in order to promote public confidence in the Exchange, its pricing mechanisms and its reference prices for the benefit of end consumers. Per Section D.1.5.1 of the SEMOpx Rules, both SEMOpx and Exchange Members are obliged to inform the Regulatory Authority whenever a suspected infringement of Chapter D of the SEMOpx Rules is detected. Exchange Members are urged to flag instances of unusual trading behaviour to the Market Monitor mailbox: monitor@semopx.com

The info@sem-o.com and info@semopx.com mailboxes are also available for general queries and support.

Kind Regards,

SEMOpx