| FERC is proposing to require RTOs/ISOs to report data from market participants regarding their “Connected Entities.” The new reporting requirement is intended to assist the Commission in detecting market manipulation. The Commission decided to convene a Technical Conference on December 8, 2015, and to extend the due date for comments until January 22, 2016. Those wishing to submit questions for staff to address during the technical conference should email their questions to CENOPR@ferc.gov by December 1, 2015. A Notice setting forth times and an agenda will be issued.
RTOs/ISOs would report to FERC data from market participants to:
“i) Identify the market participants by means of a common alpha-numeric identifier;
ii) List their “Connected Entities,” which includes entities that have certain ownership, employment, debt, or contractual relationships to the market participants, as specified in this NOPR; and
iii) Describe in brief the nature of the relationship of each Connected Entity.”
Market participants would file, pursuant to a tariff of the RTO/ISO, their Connected Entity data, subject to the obligation to update the filing within 15 days of a change in status as well as a yearly certification that the data filed is comprehensive and accurate. RTOs/ISOs would require their market participants to obtain a Legal Entity Identifier (LEI) and file their own LEIs as well as the LEIs of Connected Entities. LEIs are unique IDs assigned to single entities by the Global LEI System. The Commission proposes a tabular format for reporting this data.
“Connected Entities” is a new term that the Commission proposes to define as follows:
A Connected Entity, which includes natural persons, is one which stands in one or more of the following relationships to a market participant:
a. An entity that directly or indirectly owns, controls, or holds with power to vote 10 percent or more of the ownership instruments of the market participant, including but not limited to voting and non-voting stock and general and limited partnership shares; or an entity 10 percent or more of whose ownership instruments are owned, controlled, or held with power to vote, directly or indirectly, by a market participant; or an entity engaged in Commission-jurisdictional markets that is under common control with the market participant;
b. The chief executive officer, chief financial officer, chief compliance officer, and the traders of a market participant (or employees who function in those roles, regardless of their titles);
c. An entity that is the holder or issuer of a debt interest or structured transaction that gives it the right to share in the market participant’s profitability, above a de minimis amount, or that is convertible to an ownership interest that, in connection with other ownership interests, gives the entity, directly or indirectly, 10 percent or more of the ownership instruments of the market participant; or an entity 10 percent of more of whose ownership instruments could, with the conversion of debt or structured products and in combination with other ownership interests, be owned or controlled, directly or indirectly, by a market participant; or
d. Entities that have entered into an agreement with the market participant that relates to the management of resources that participate in Commission-jurisdictional markets, or otherwise relates to operational or financial control of such resources, such as a tolling agreement, an energy management agreement, an asset management agreement, a fuel management agreement, an operating management agreement, an energy marketing agreement, or the like.
The full texts of the Connected Entities NOPR and Notice of Technical Conference are available on the NEM Website.
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