BDEW: meeting of the EU Economic and Financial Affairs Council:
Financial market regulation must take into account the special characteristics of energy trading
BDEW: disadvantaging of communal procurement platforms must be avoided
“The experience of the crisis in financial markets has shown that making such markets more transparent and regulating them more strictly is an eminently important objective, and this is also supported by the energy industry. However, this regulation should not spread into areas such as the European wholesale energy trade, which is not relevant to the system”, said Hildegard Müller, Chairwoman of the General Executive Management Board of the German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft - BDEW) in Berlin today, following the position adopted by the Economic and Financial Affairs Council (ECOFIN Council) of the European Union on the revision of the EU Markets in Financial Instruments Directive (MiFID II). From the perspective of BDEW, the position of the council contains several positive points, however also some areas of criticism:
“A positive point is, in our view, that companies which only undertake energy trading as an ancillary activity – where their core business is the supply of customers with energy – are to be exempt, according to the vision of the ECOFIN Council, from the scope of application of MiFID. The Council also correctly supported the principle that communal procurement platforms should be able to utilise the ancillary activity exemption just like energy companies can. However, the proposals on its specific construction are, in the opinion of BDEW, not yet adequate in order to retain the variety of procurement platforms which were created after deregulation”, said Müller. Generally, it should be welcomed that, in addition to the European Parliament, the Council also did not, in principle, define physically settled derivative contracts as financial instruments. BDEW believes that it must now also be specifically ensured that delivery contracts for electricity and gas do not become part of the financial sector.
“In the upcoming tripartite negotiations between the European Parliament, European Council and the European Commission, the parties involved must clearly recognise the differences between the physical business of the energy industry and the activities of financial institutions”, demanded the Chairwoman of the BDEW General Executive Management Board.