Supervision of energy derivatives trading is too opaque

Market participants in the trading of energy derivatives are often unaware of the exchange of their business-sensitive information by and amongst national and European national regulatory authorities, while it is essential that they can trust their data to be kept confidential. This is one of the most striking findings of Liebrich Hiemstra, who will receive her PhD at Tilburg University on Friday, Jan. She makes several recommendations to improve the market supervision of energy derivatives trading. The (cross-border) trade in energy derivatives is supervised by EU agencies ACER and ESMA in close cooperation with national regulators of EU member states. Market participants are required to disclose data on their trade in energy derivatives to the supervisory authorities, including business-sensitive information. This data exchange takes place on the basis of the Regulation on Wholesale Market Integrity and Transparency (REMIT). The regulation makes the prohibition of market abuse more concrete for the energy sector, which is essential to ensure the stable and orderly functioning of wholesale energy markets.