Findings released from Financial Transmission Rights market conduct investigation

In 2022 the Electricity Authority Te Mana Hiko consulted with industry and stakeholders seeking feedback on the Financial Transmission Rights (FTR) market. From this, we then released a decision paper containing the results of this consultation, which found that the market was operating broadly as intended.

Subsequently the Authority began an investigation into whether there was a need for additional regulation of trading conduct in the FTR market and whether information asymmetries were impacting trading in the FTR market.

We have now completed this investigation into market conduct and information asymmetries in the FTR market and found no evidence to suggest that current regulation settings are leading to market misconduct.

We also found no evidence to suggest that asymmetries in access to information is leading to financial gain for some participants.

In addition, we have found there are systems and processes in place that minimise the risk of information asymmetries occurring that could otherwise lead to trading misconduct, such as public outage planning information provided by the system operator.

Next steps

We will continue to monitor the FTR market from a conduct and information asymmetry perspective and will investigate further if the need arises.

We will not be releasing an issues paper on this matter as previously indicated. We noted in our 2022 Market Review decision paper that we would maintain a watching brief on the design and operation of the FTR market to ensure it is operating in the long-term benefit of consumers.