EU Regulator Eyes “Wash Trades”

The EU’s energy regulator is probing “wash trades” for potential price fixing on European power and gas markets.

The Agency for the Cooperation of Energy Regulators (ACER) said that traders suspected of seeking to fix artificial prices “are prone to be further inspected,” Bloomberg reported May 14.

 Wash trades feature no change of ownership or market risk, and can be done to distort market prices or, if done through a broker, to trigger commission fees. ACER’s attention has been attracted as trading hub prices for electricity and gas converge across the region.

“Very often we can see in our own system that a wash trade is of grave concern,” ACER’s head of market surveillance Martin Godfried told the newswire.

The number of alerts of suspicious behavior manually assessed by ACER was highest in June, July and September last year, at about 1,400 in each of those months. About 20% of the alerts were related to the wholesale gas market. ACER passes any information it gathers on to national regulators, which enforce the rules.

It’s “too early” to determine whether wash trades are a major concern in Europe, Godfried said. “We are not saying a wash trade is a breach event. It’s not.”