Entering a new market starts with obtaining the correct license, which is a complex and time-consuming process. Time2Markethelps you navigate regulatory requirements, communicate with the regulatoryauthority in your target market, and secure the necessary license for yourtrading activities.
To understand where a license fits in the market access process, please find an overview here →
Most power and gas markets are licensed, which means a license is required to become a balance responsible party (BRP).In these markets, the national regulatory authority (NRA) grants a license after a thorough KYC procedure.
However, there are few markets in Europe, where a license is not required. In these markets, the entry procedure can be simple, but the lack of a license can be a hurdle in future market access procedures.
There are two licenses that NRAs can grant, a trading or a shipping license. When entering gas markets, trading and shipping licenses are usually mandatory, while they can sometimes be avoided in power markets.
The type of license a market entrant needs is heavily dependent on whether you plan to trade physical or financial energy. However, if you’re not formally recognized as a shipper, you cannot bid in gas capacity auctions with PRISMA. Regarding power capacities, there is a wide range of options in terms of licensing.
A national regulatory authority (NRA) is a public authority that usually governs the energy market within a country’s area, which, in some cases, can be multiple TSOs. NRAs have a few vital roles in energy markets:
· Trading and shipping licenses are granted by the local national regulatory authority (NRA)
· National regulatory authorities work with ACER to identify and prevent market abuse.
· REMIT II is enforced by NRAs on a national level in each market. NRAs impose fines for breaches of the REMIT regulations.
The licensing process can differ widely from one market to another. Applications often require comprehensive details about your business, including financial, organizational, and operational details, as well as existing licenses.
Some NRAs may also require notarized, certified, or translated documents as part of their KYC procedure.
Being well-prepared for these requirements is crucial for a smooth application process.
Disclaimer: The energy industry is extremely dynamic and ever-changing, which means regulations and market access procedures can change without notice. Please refer to each counterparty's website for up-to-date information specific to your case. Time2Market ApS is not responsible for the completeness, accuracy, and actuality of the information provided. This article is intended for informational purposes only and should not be considered business or legal advice.
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