Being an electricity exchange, Nord Pool is obliged to monitor trading activity with the aim to detect possible breaches with the prohibition against market manipulation and insider trading. Any suspicious activity will be reported to the relevant National Regulator(s) (NRA). These obligations are in place to promote a fair and efficient market in the interest of all market participants.
The Market Surveillance department has been in place since 2001, and has a long experience monitoring the market and advising members.
To ensure that Market Surveillance and the NRAs have a common understanding of REMIT, and that members are treated equally regardless of which country they operate in, MS has a close cooperation with the NRAs. Market Surveillance cooperates in a sub-group to the regulatory council where participants from all the Nordic, Baltic and UK regulators are represented. A Memorandum of Understanding has been signed with the regulators and ACER. Read more about this here:
Reactions and Sanctions
According to article 15 of REMIT, Market Surveillance is obliged to inform the NRA should there be any suspected breaches of the prohibition against market manipulation or the prohibition of insider trading as set out in REMIT. According to the market place license from the Norwegian regulator, Nord Pool is also obliged to report possible breaches of other laws and regulations affecting the Nord Pool market. To ensure an efficient, transparent and well-functioning market, Market Surveillance may also report possible breaches on our own initiative, for example when we receive input from participants on specific incidents.
When Market Surveillance reports a possible breach to the relevant NRA(s), the concerned market participant will normally not be informed. The reason for this is that there is a rule against revealing such information by law in some countries, and to ensure equal treatment, and to minimize the risk of tampering with evidence.
For investigations and breaches of the Market Conduct Rules, the detected violations are sanctioned according to the following guidelines:
- Minor violation: Non-public warning to the member.
- Significant violation: Formal, written warning. Published under Exchange information at Nord Pool’s home page.
- Serious violation: Formal, written warning or violation charge of up to NOK 2.5 million.
Sanctions are executed by the board of Nord Pool, based on a recommendation from Market Surveillance.
It should be noted that willful violations of rules and legislation are rare, reflecting that our members rely on a good reputation.