UK Offence Report

Offences of market manipulation in wholesale energy products

regulation 4(2) of The Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015

This offence was read from the text as made, and no revised version was available, so a later revocation could not be ruled out. Check the current text at legislation.gov.uk.

What the provision says

2 It is an offence for

a person to enter into

a transaction or issue an order to trade in relevant wholesale energy products where—

a the person entered into the transaction or issued the order with the intention that the action would secure (by one person or

a number of persons acting in collaboration) the price of relevant wholesale energy products at an artificial level, or

b the person was reckless as to whether entering into the transaction or issuing the order would have that result, as prohibited by Article

5 of REMIT when read with Article 2(2)(a)(ii).

Text as made, from legislation.gov.uk. © Crown copyright, reused under the Open Government Licence v3.0. This is the text as originally made; later amendments are not shown here.

Who it binds, and what has to be proved

Binds
a person
Conduct
breaching the provision
Fault element
Requires proof of a state of mind
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove both that the conduct happened and that it was done with the state of mind the provision names (with the intention that).

The provision states no defence, so the prosecution bears the burden on every element of the offence.

Classifier’s reasoning: mens rea word in the offence-creating words: with the intention that.

What would breach regulation 4(2)?

These are illustrations, not law. They are generated from the provision’s own words to show the shape of the offence. Whether any particular conduct is caught depends on the full text, on any amendment since, and on the facts.

  1. Doing what the provision prohibits, or failing to do what it requires under the Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015.

Penalty

Mode of trial
Not determined
Maximum fine
Not determined
Maximum prison (summary)
Not determined

no penalty is stated in this instrument; it may be in the enabling Act, or in a general penalties provision this pass did not connect to the offence.

No penalty was determined from this instrument. It may be in the enabling Act, or in a general penalties provision this pass did not connect to the offence. Absence of a figure here is not evidence that the offence carries no penalty.

Sentencing

Offences of this kind are usually sentenced under the guidelines below. This is a mapping by subject, not a finding about this provision, and the links go to a search of the Sentencing Council’s own site.

Prosecution figures

No published per-offence figure was found for this provision, and it could not be matched to a Ministry of Justice offence code. Offences created by statutory instrument very largely do not have one. Absence of a figure is not evidence that the offence is unused.

Status and lifecycle

Current status
Status not determined
Made
23 March 2015
In force from
Not determined
Extent
Not stated

How this was established: read from the text as made; no revised version available, so later revocation could not be ruled out.

What the instrument is for

(This note is not part of the Regulations) — the explanatory note published with the instrument, © Crown copyright.

These Regulations extend to the United Kingdom and create criminal offences for two sets of prohibitions in Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency (OJ No L 326, 08.12.2011, p1) (“REMIT”) – those for insider dealing (Article 3) and for market manipulation (Article 5). REMIT imposes obligations and prohibitions in relation to trading in wholesale energy products within the European Union. “Wholesale energy products” are contracts and derivatives relating to electricity and gas, as defined in Article 2(4) of REMIT. The Regulations prescribe an Authority, in regulation 2, that is primarily responsible for the investigation and prosecution of offences under these Regulations in particular geographical areas. The Authority is Ofgem for Great Britain and the UK offshore marine area, and the Northern Ireland Authority for Utility Regulation for Northern Ireland. The offences created refer to specific provisions in REMIT, and exemptions in REMIT to any relevant prohibitions apply. The offences created do not criminalise activity that is not prohibited by REMIT. Regulation 3 creates offences for insider dealing, based on the underlying prohibitions in Article 3 of REMIT. The offences in regulation 3 are limited to persons who possess inside information in relation to wholesale energy products as defined in REMIT, know (or ought to have known) that the information is inside information and are within the categories of persons to whom the REMIT prohibition applies. The offences in paragraph (2) of regulation 3 can only be committed if there is sufficient territorial link to the UK. Conditions for establishing such a link are set out in paragraph (9) of regulation 3. The offences do not apply to activity required by orders made under the Energy Act 1976 (c. 76) or the Civil Contingencies Act 2004 (c. 36). Regulation 3 provides for specific defences in paragraphs (4) to (8). Regulation 4 creates offences for market manipulation, as prohibited by Article 5, when read with the definition of market manipulation in Article 2(2)(a) and (b), of REMIT. The offences in paragraphs (1) to (3) of regulation 4 can only be committed if there is sufficient territorial link to the UK. Conditions for establishing such a link are set out in paragraph (7) of regulation 4. Regulation 4 provides for specific defences in paragraphs (4) to (6). Regulations 5 and 6 amend the Electricity and Gas (Market Integrity and Transparency) (Enforcement etc.) Regulations 2013 (S.I. 2013/1389) and the Electricity and Gas (Market Integrity and Transparency) (Enforcement etc.) Regulations (Northern Ireland) 2013 (S.I. (NI) 2013/208), so as to provide that powers available to the regulatory Authorities (defined in regulation 2) under those instruments are available for the investigation of offences under these Regulations. Regulations 7 and 8 make provision for the application of the offences in these Regulations to partnerships and bodies corporate. Regulation 9 requires each Authority to consult and then publish guidance on enforcement. Regulation 9(3) allows for the consultation requirement to be dispensed with where earlier consultation covers enforcement guidance. Regulation 10 states who can prosecute offences under these Regulations. Provision for Scotland is omitted, as this would by the Lord Advocate in all cases. Regulation 11 makes provisions for the penalties available to the court for offences under these Regulations. Regulation 12 provides for the review of these Regulations. A full impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available from the Department of Energy and Climate Change at 3 Whitehall Place, London, SW1A 2AW and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.

Read the full note and every offence in this instrument

What Parliament said

Mentions of this instrument in Hansard. Parliamentary material is reused under the Open Parliament Licence v3.0.

Other offences in the same instrument

How this was identified as an offence

Everything above rests on the judgement that this provision creates a criminal offence, rather than mentioning one. That judgement is made by rule, from the words of the provision, and this is the rule that made it — with a confidence of 0.90.

Basis
the provision says “it is an offence”; the provision says an offence is committed “if” something happens
Confidence
0.90 of 1.00

A provision that states a penalty for an offence created elsewhere can read very like one that creates an offence, and the rules can mistake the one for the other. If the text quoted above sets a penalty for something made an offence by another provision, treat the classification on this page with that in mind, and read the instrument.

Check the source