Athens, 21 October 2009 Carlo Comporti Interdependency of energy and financial markets

Important regulatory objectives for physical and financial electricity and gas markets – Market integrity – Market transparency Regulatory cooperation needs – Cross-sectoral cooperation – International cooperation and consistency Outline 2 World Forum on Energy Regulation IV

One of the fundamental objectives of securities regulators Market Abuse Directive (MAD) in the EU provides a common EU framework for: – Disclosure of price sensitive information to the market – Prevention, detection, investigation and sanctioning of insider trading and market manipulation – Does not cover physical energy markets, incomplete coverage for energy derivatives The types of administrative sanctions and amount of fines left at national discretion in MAD  wide divergence between Member States Market integrity 3 World Forum on Energy Regulation IV

The EU energy (ERGEG) and securities (CESR) regulators support the introduction of: – A requirement in the energy sector legislation to disclose information likely to influence physical and/or derivatives markets prices (including fundamental data) – A tailor-made market abuse framework in the energy sector legislation for all electricity and gas products (whether exchange or OTC traded) not already covered by MAD Market integrity 4 World Forum on Energy Regulation IV

Transparency of trading contributes to price formation and efficiency of markets Markets in Financial Instruments Directive (MiFID) introduced pre- and post-trade transparency requirements for equity markets in the EU For other markets currently no EU legislation, but EU securities and energy regulators support publication of harmonised post-trade information – By EU energy exchanges (both physical and derivatives) and broker platforms – On standardised contracts – On a trade-by-trade basis Market transparency 5 World Forum on Energy Regulation IV

Physical and financial energy markets closely interlinked, products can in many cases substitute each other Need for exchange of information collected by sectoral regulators EU energy and securities regulators see a need for increased cooperation – Multilateral and bilateral Memoranda of Understanding Cross-sectoral cooperation 6 World Forum on Energy Regulation IV

Especially financial energy markets are global Need to follow regulatory developments globally in order to ensure sufficient consistency Recent examples of planned regulatory amendments in the U.S. with possibly wide implications: – Requirement for central clearing and trading of standardised OTC derivatives (U.S. Treasury) – Review of the current application of position limits and exemptions from position limits in energy markets in order to curb speculation (CFTC) International cooperation 7 World Forum on Energy Regulation IV