December 2011 marked the birth of REMIT regulation that primarily fixates on eradicating insider trading and market manipulation, in addition to enhancing the stability and transparency of the energy markets. REMIT regulation also puts an obligation on the market participants to publish inside information.
It is however notable that failing to comply with REMIT requirements will lead to a penalty on the participants of the energy markets that are primarily financial. The nature of these penalties will depend on the solemnity of the infringement that is determined by the amount of damage caused to the consumers. REMIT energy penalties are solely decided by government authorities who have a set of protocols, which are a mandate to follow when it comes to imposing financial ordeals.
Below mentioned are some important aspects authorities keep in mind before imposing a financial penalty:
- It must be ensured that the person subjected to a financial penalty has failed to comply with the REMIT requirements.
- The authorities must take in account the appropriateness of the financial penalty imposed on an individual.
- The amount which is allocated for the financial penalties should be reasonable and rational at all times.
It is important for all the energy market participants to understand the criteria for the obligation of financial penalties. The following section will thoroughly guide you through all the factors which might cause you a financial penalty.
- Misleading the authority is the chief cause of imposition of a financial penalty. Providing inaccurate or false information will certainly lead to punishment.
- Consumers are given top priority in any market. So even a little damage to the interest of the consumers will cause market participants to face severe consequences.
- Deliberate breach in the REMIT is considered to be very dreadful. It not only displays a reckless approach but also discourages compliance.
- Even a slight breach that could have created a misbalance in the energy market also falls under the criteria for financial penalty.
Let us now move on to some of the dynamics that determine the intensity of a financial penalty imposed on a market participant.
- Financial penalty due to failing to meet REMIT requirements directly takes in account the amount of damage caused. The more the amount, higher is the financial penalty.
- The degree to which consumers are harmed as a result of the breach in REMIT requirements also determines the amount of financial penalty to be imposed.
- While determining the amount of financial penalty, the authorities also keep track of the demographic details. For instance, information like whether the person on whom the penalty is imposed an individual or a group of people plays a decisive role in determining the penalty amount.
Energy market standards are more stringent than ever. REMIT energy requirements has been brought in to enhance the quality of the products and delivering the best of the best to the consumers. The financial penalties imposed after failing to meet the requirements not only makes a serious monetary dent but it also affects the credibility. Therefore it is highly advisable to meet the REMIT requirements and save yourself from any sort of penalties.