February 1, 2018 / 11:12 AM / 7 months ago

UK government to give Ofgem new powers to prevent energy market abuse

LONDON (Reuters) - The British government said on Thursday it would give energy market regulator Ofgem additional powers to prevent manipulation and insider trading in British wholesale energy markets.

FILE PHOTO - The sun rises behind electricity pylons near Chester, northern England October 24, 2011.

European Union rules called REMIT prohibit insider trading and abuse in energy markets in the 28-nation bloc.

Ofgem enforces the regulation in Britain and can impose financial penalties and also remove documents which appear relevant to an investigation when searching premises under warrant.

However, when presented with a large number of documents and/or those stored electronically, it might not be possible for Ofgem to separate the relevant and irrelevant documents on the premises and it has no power to take them away to sort them off-site, the government said in a decision.

The government said it would give Ofgem the power to seize material and examine or sift it elsewhere.

Ofgem also relies on intelligence gathering about potential market manipulation and it would help if a public entity such as the Competition and Markets Authority was able to disclose information to it, the government added.

“We believe there are clear benefits from bringing forward these additional powers for Ofgem to make the market work better for consumers overall,” it said.

“We will therefore proceed with introducing the powers as described through secondary legislation,” it added.

Reporting by Nina Chestney, editing by David Evans

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