The Netherlands Authority for Consumers and Markets (ACM) has reprimanded (6 February) an international company for potential market manipulation on the Dutch wholesale market for natural gas (TTF). The company, a major competitor in the sector, has committed to ceasing the trading practice in question, known as ‘marking the close.’ ACM has pledged to continue monitoring the company’s activities closely.
Importance of the Dutch TTF Market
The Dutch TTF is the largest wholesale market for natural gas in Europe, with trading volumes three times larger than all other European natural gas markets combined. Given its critical role in determining energy prices across Europe, ensuring fair price formation is paramount. Market manipulation on this platform can have widespread consequences, potentially leading to higher energy prices for both businesses and consumers.
Understanding ‘Marking the Close’
‘Marking the close’ is a form of market manipulation where a trader influences the reference price of natural gas by executing trades right before the close of the trading session. The TTF Heren Day Ahead price, determined daily at 17:30, serves as a key reference for gas prices across the European Union.
This illicit practice involves placing large orders or significantly raising bid prices just before the market closes, artificially inflating the reference price. The manipulating trader benefits when earlier contracts are settled at this inflated price, while other traders and consumers bear the financial burden.
ACM’s Commitment to Fair Market Practices
ACM enforces compliance with the European Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), which prohibits market manipulation in energy trading. The regulator views ‘marking the close’ as a serious infraction that can distort market fairness and lead to increased costs for end users.
The reprimanded company has agreed to refrain from engaging in this practice going forward. ACM has affirmed its commitment to vigilant oversight to prevent future violations and maintain a fair and transparent energy market.
Implications for the Energy Sector
This case underscores the importance of regulatory oversight in preventing unfair trading practices that could distort energy markets. With energy prices already a major concern for European consumers, ensuring integrity in gas trading is critical for economic stability. ACM’s continued scrutiny will help safeguard market fairness and protect businesses and households from potential price manipulations.
