Monitoring

Resolution №7 of the Commission of March 30, 2021, on the approval of the Energy Market Monitoring and Reporting Rules establishes a legal framework for the monitoring of wholesale energy markets to detect and prevent trade in inside information, market manipulation, or attempted manipulation.

Articles 55-56 of the Rules define market manipulation / attempted market manipulation:

Market manipulation involves:

A) Placing any bid and/or tender proposal or concluding a transaction when trading in wholesale energy products, which:

A.a.) gives or may give false or misleading signals about the supply, demand, or prices of wholesale energy products;

A.b.) sets (fixes) or attempts to determine (fix) the price of one or more wholesale energy products at an artificial level, by the coordinated action of a person or persons, unless the person who has entered into a transaction or placed a bid and/or a tender proposal justifies his reasons for the conduct and that the conclusion of such a transaction or the placing of a bid and/or a tender proposal is in line with the lawful market practice in the wholesale market.

A.c.) uses or attempts to use fictitious means or any other form of misleading that gives or may give erroneous or misleading signals about the supply, demand, or pricing of wholesale energy products.

(B) the dissemination of information through the media, including the Internet or any other means, as well as false or misleading news that gives or may give false or misleading signals about the supply, demand, or pricing of wholesale energy products and where the disseminator knew or should have known that the information was fake and misleading.

Attempted manipulation of the market includes:

A) Placing any bid and/or tender proposal or concluding a transaction or performing other actions in the trade of wholesale energy products in order to:

A.a.) issue false or misleading signals about the supply, demand, or prices of wholesale energy products.

A.b.) to determine (fix) the price of one or more wholesale energy products at an artificial level, by the coordinated action of a person or persons, unless the person who made the transaction or placed a bid and/or tender proposal justifies the reasons for his behavior and that such submitting of a transaction or placing a bid and/or tender proposal is in line with the allowable market practice at the wholesale market.

A.c.) issue or may issue false or misleading signals about the supply, demand, or pricing of wholesale energy products, using fictitious means or any other misleading form.

(B) the dissemination of information through the media, including the Internet or any other means, intended to give false or misleading signals by a wholesale energy market participant about the supply, demand, or pricing of wholesale energy products.

As for the prohibition of insider trading, according to Article 52 of the Rules, owners of inside information on wholesale energy products are prohibited:

• Using inside information, directly or indirectly, for the benefit of oneself or another person, to purchase or dispose of, as well as to attempt to purchase or dispose of those wholesale energy products to which this information relates;
• Disclosure of inside information to any other person, except when disclosure of inside information occurs in the course of their official and/or professional duties;
• To recommend or encourage another person to purchase or dispose of such wholesale energy products on the basis of inside information to which this information relates.

>> Obligations of Persons Professionally Arranging Transactions

The obligation to observe and monitor the behavior of market participants in the wholesale energy market also arises for Persons Professionally Arranging Transactions.  They shall ensure that effective measures are taken to detect violations of the requirements of trade and prohibition of manipulation or attempted manipulation at the energy market using inside information and to inform the Commission if there is a reasonable suspicion of a possible breach.