On May 16, ISDA, FIA and FIA European Principal Traders Association submitted a joint response to the European Commission’s (EC) consultation on the review of the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT). In the response, the associations highlight their concerns over several draft amendments in the legislative proposal. These include the expansion of the definitions of ‘Person Professionally Arranging Transactions’ to include a reference to ‘Persons professionally engaged […] in the execution of transactions in wholesale energy products’. The associations note that the additional reference to ‘execution’ could ultimately capture anyone who, as part of their profession, is a counterparty to a transaction relating to a wholesale energy product including, for example, any end user buying a wholesale energy product for its energy-intensive industrial process. Furthermore, the associations believe that the proposed changes to Article 9 with respect to third-country firms will create an unjustified and disproportionate market barrier and could have a negative impact on the EU power and gas market and its liquidity, as it is unclear whether the proposed change requires establishing an EU branch or if it would suffice to provide an address. Introducing a requirement to establish EU entities would lead to a competitive disadvantage for the European power and gas market, as well as a significant reduction in liquidity.
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