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REMIT Implementation in DONG Energy

REMIT Implementation in DONG Energy. DERA Seminar, 27 April 2012 Marie-Louise Piil Christensen. Agenda. 1. Challenges in relation to REMIT Implementation. 2. Overall Approach in DE. 3 . Insider Trading Policy – Main content . 4. What have we done – step by step.

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REMIT Implementation in DONG Energy

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  1. REMIT Implementation in DONG Energy DERA Seminar, 27 April 2012 Marie-Louise Piil Christensen

  2. Agenda 1. Challenges in relation to REMIT Implementation 2. Overall Approach in DE 3. Insider Trading Policy – Main content 4. What have we done – step by step 5. Outstanding issues to be clarified by ACER/Regulatory Authorities 6. Next steps

  3. REMIT Implementation – Main Challenges REMIT Regulationcameinto force across Europe on 28 December 2011 • Main Challenges: • Short time frame for implementation • Framework Regulation => Broad and vaguewording => Grey areas and uncertaintye.g. in relation to definitions • Numerous requirements in order to becompliant • Change of "Culture" in someareas of the energysector

  4. 'REMIT' Implementation Overview/Elements/Hierarchies Overall Compliance Officer (Legal) Responsible for establishing the overall general guidelines and procedures in cooperation with the different Business Units Business Unit Compliance Officer for EM Business Unit Compliance Officer for POWER Business Unit Compliance Officer for E&P Business Unit Compliance Officer for S&D Business Unit Compliance Officer for REN Business Unit Compliance Officer for GTRM Responsible for the practical implementation on BU level and compliance

  5. Insider Trading Policy Contains general guidelines for the handling of inside information and other precautions and procedures necessary to ensure DE's compliance with new and existing insider rules Insider Rules Market Abuse Directive (MAD) Financial Instruments REMIT Power & Gas Products

  6. Insider Trading Policy MAIN CONTENT General information on REMIT + MAD Description on primary obligations and prohibitions, e.g. against insider trading Who are covered? All directors, managers and employees Power + gas, transport agreements and related derivatives + financial instruments What is covered? Production and trading separated (physically, IT systems etc.) Establishment of Chinese Walls All employees with inside information are listed on an insider list Insider lists Procedures for handling of inside information Inside information may not be shared with anyone until published to the market Publication of inside information Insider information is published on our websites immediately or ASAP Sanctions Not yet known, but probably fines and imprisonment (+ bad publicity)

  7. Implementation Process – Step by Step I Internally in DE Has been published on the Intranet in a Danish and English version + sent out to all relevant employees Deployment of overall DE Insider Trading Policy Used when DE engage external consultants, e.g. external lawyers, auditors etc. Preperation of Insider Trading Policy for external consultants Short section on handling of inside info and market abuse rules in overall DE Compliance Program Mandatory – Will be rolled out to all DE employees Short case in overall compliance program and more detailed REMIT specific program for relevant employees Development of e-learning programs DE Websites and in the future also Energinet.dk Publication meassures Has been carried out for all relevant employees in DK and abroad. Info meetings and educational sessions for relevant employees

  8. Implementation Process – Step by Step II Internally in DE Establishment of Insider lists Centrally managed by HR Bi-weekly meetings have been held with these regarding the implementation process Compliance Officers have been appointed in all departments Have been made and distributed in all departments Specific written procedures for handling of inside information etc. Establishment of overall DE Compliance Log And department specific Compliance Logs To ensure that DE's implementation level is aligned with level in other EU countries and available recommendations Participation in working groups and industry organisations Registration of DE as Energy Trader with Energitilsynet Postponed until mid 2012 Participate in DERA Working Groups (at present WGs on Upstream) On-going

  9. 'DE Register book' – The framework of implementation

  10. Outstanding issues to be clarified by authorities Primarily in relation to thresholds on gas, "precise nature" and "any other information" Definition of Inside Information still unclear Power, gas, balancing markets etc. – European, National or even more local? Identification of the markets relevant for compliance of the Regulation Intention and relevance of "unable to meet contractual obligations" condition Hedging exemption clarification Publication of availability Is this technical or commercial availability There should be one European or National Website, where all inside info must be published Publication Platforms LNG storage is covered by the Regulation – what about LNG Trading? LNG

  11. Next Steps in the REMIT Implementation Process On going follow-up and monitoring of compliance Necessary adaptions of internal policies based on coming ACER Guidelines Registration of DE as Energy Trader with DERA - probably earliest mid 2012 • Level II – Reporting Obligation • Expected to come into force mid 2013 • Details on the reporting obligation still lacking • Energy companies in EU currently awaiting further details/guidelines • Internal implementation process expected to last at least 12 months

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