REMIT Regulation and The Need for Mobile Archiving in the energy market

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REMIT Regulation and The Need for Mobile Archiving in the energy market

REMIT is the EU Regulation on Wholesale Energy Market Integrity and Transparency aimed at preventing wholesale energy market abuse. This comes at a time when companies face broader challenges in retaining and archiving records and communications. Moreover, businesses are still dealing with the tremendous changes brought by the Work from Home and COVID restrictions requiring them to adjust their stand on communication and compliance.

The record-keeping of business data is often treated as an afterthought by most legal and compliance teams, and a common belief is that maintenance of records is merely something to be executed through generic approach of collecting data from the surface. But a problem arises for regulations such as the REMIT that requires that mobile communication is archived and monitored. This drives energy firms dealing with utility transactions to record text messages and mobile calls.

While manual processes may meet the barest of the mandates specified by the REMIT for companies to monitor mobile communications, record text messages and archive those, they cannot streamline the activities without an automated mobile archiving solution.

The REMIT regulation in detail

REMIT is an EU regulation framework that tends to increase transparency, stability and prevent abuse of the energy markets while controlling market manipulations. Since this regulation came into effect nearly a decade ago in 2011, leading energy firms and energy traders have been forced to comply with its record-keeping rules.

Obligations imposed by REMIT

Following are the key themes of obligations imposed by the REMIT regulation. Including the “requirement to record conversations and keep a copy of electronic communications.”

  • Transparency – Obligations for energy market participants to disclose inside information and maintain absolute transparency of data
  • Monitoring – Sector-specific, comprehensive monitoring framework for wholesale energy markets
  • Integrity – Explicit prohibition of unethical and abusive practices in the energy market
  • Cooperation – Close cooperation & coordination between ACER (EU-wide monitoring) and NRAs (national monitoring, investigation and enforcement)

In addition to these obligations, the Transaction Reporting User Manual (TRUM) and REMIT Requirements for the registration of RRMs (Trade and Fundamental data) along with Manual of Procedures on transaction and Fundamental Data Reporting raise new requirements for companies to record text messages for data sharing activities. In fact, the standards indirectly require firms to use a mobile communication recording solution for meeting the text and call archiving requirements as per the REMIT regulation.

Penalties and fines for non-compliance with REMIT regulation

In the technology-driven era, where a lot of data is being generated across multiple communication channels, ensuring the proper collection, monitoring, and inventory of archival content is of utmost importance for compliance with the REMIT regulation.

REMIT creates a high demand for mobile recording solutions that can capture and archive communications.

The usage and popularity of mobile IM chat applications such as WhatsApp and WeChat in the market of energy trading has given a boost to the need to archive text messages, call data, and mobile chat applications so that the recordings are made accessible for inquiry by regulators and the compliance teams of the firm.

Financial penalties and restitution concerning individuals in market abuse cases

Several regulated companies failed to meet the record-keeping requirements mentioned by REMIT and were penalized with monetary fines and legal investigations. For example, companies like BP and Morgan Stanley fired their employees for the use of unauthorized mobile channels.

But all firms now understand that they must allow mobile usage to boost employee productivity, generate more business and adapt to today’s communication channels.

The need to access mobile communication and investigations by regulators are consequences that often do not fully manifest until months after ad-hoc attempts of such companies to record and gain legal hold of text messages and mobile communication conducted in relation to such incidents – typically because of the lack of coverage in collecting mobile communications data.

Any business seen to be in breach of retaining text messages and calls data is facing the risk of fines and investigations for manipulating the market, or misleading traders and investors. Such behavior can lead to harsh financial penalties according to the REMIT regulation.

The charges imposed for the inability of call archiving and recording text messages usually revolve around unlawful disclosure of inside information or transaction manipulation and misleading dissemination. As per the REMIT regulation, the failure to record WhatsApp, WeChat and other text messages and calls can lead to millions in fines and a substantial reputational damage. The breach of any one of the articles under the REMIT regulation can lead to legal proceedings of up to 2-3 years

Market abuse penalties – Case studies

Each EU member state appoints a National Regulatory Authority (NRA) body to enforce the REMIT rules. This discretionary power includes the act of issuing fines for breach. For example, if a business working in Ireland is noticed to have breached any of the REMIT standards, the NRA for Ireland, Commission for Regulation of Utilities (CRU), will take the necessary action and impose the penalties accordingly.

A market participant under the REMIT regulation that owns or controls multiples sites with a significant technical energy capability (over 600GWh) must pursue almost all the record-keeping requirements including he ones under Article 3(1) (a) (vii) of Commission Implementing Regulation (EU) No 1348/2014. The failure to comply with this section will lead to monetary fines of about millions of Euros.

Guidelines to retain text messages and calls data for at least 6 months

It is clear from the above use cases that mobile archiving for text message and calls monitoring is of utmost importance for businesses pursuing compliance with the REMIT regulation. In addition, equally important are the activities related to the retention of the data.

The Procedural Guidelines by the REMIT regulation set out the market monitoring, investigatory and enforcement powers that the Authority has been given. These guidelines strictly regulate businesses for the retention of records and copies of data for at least 6 months from the date they were created. In essence, any manual, ad-hoc approach to record-keeping does not automate the retention of data for 6 months before deletion. This applies to all activities performed by businesses around mobile archiving and text message monitoring.

Importance of ensuring compliance with the REMIT regulation

Compliance must a be a top priority for the energy markets as more corridors are being connected through sophisticated digital networks developed by global operators. The accountability and responsibility raised by the REMIT regulation create new grounds for businesses that are bound to the long-standing due diligence and obligations. Compliance with these regulations and standard mean greater operational efficiency and enhanced customer service.

Communications compliance at every step

Since transparency and proper disclosure of information forms one of the key aspects of the REMIT regulation, insider risks must be appropriately analyzed and addressed by monitoring text messages and calls data. For instance, businesses must be able to proactively archive text messages and calls data before an inquiry and retain it for only the specified time (6 months) before deletion. Such accurately organized steps will lead to complete compliance with the REMIT regulation.

Businesses must carefully select a mobile archiving solution to ensure compliance with REMIT regulation and other such standards.

About TeleMessage

TeleMessage captures and retains mobile content, including mobile SMS messages, voice calls, and WhatsApp, and WeChat conversations from corporate or BYOD mobile phones to ensure compliance with various data protection regulations. The messages are securely and reliably retained within TeleMessage servers or forwarded to your choice of archiving data storage vendor.

Our mobile archiving products securely record content from mobile carriers and mobile devices for various ownership models (BYOD, CYOD, and employer-issued). With our multiple archiving solutions, you can always find the right tools or blend for your requirements:

TeleMessage offers cross-carrier and international mobile text & calls archiving for corporate and BYOD phones. Visit our website at www.telemessage.com to learn more about our mobile archiving products.

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