no 07/08 Board of Nord Pool ASA sanctions Alfa Kraft AB for market manipulation

(Lysaker, 25 April 2008) The board of Nord Pool ASA decided in its meeting on 24 April 2008 to issue a violation charge of NOK 700,000 towards Alfa Kraft AB for market manipulation in the financial electricity market. 

Nord Pool ASA (Nord Pool) has investigated the trading activity in ENOYR-08 of Alfa Kraft AB Alfa Kraft) on the 1 June 2007 and found that Alfa Kraft has violated the Market Conduct Rules section 5.1 on market manipulation. 

The investigations found that Alfa Kraft at 14.59h on 1 June 2007 executed a sale over Nord Pool's electronic exchange trading system in ENOYR-08 of 1 MWh at € 45.30 and thereafter entered another two offers of 3 MWh and 5 MWh both at € 45.30. Shortly thereafter Alfa Kraft executed a purchase in ENOYR-08 of 10 MWh at € 45.30 in the OTC-market. The seller of the OTC-contract had prior to the trade at € 45.30 offered € 45.40 for the same volume. Shortly thereafter Alfa Kraft cancelled its two offers at € 45.30 over the exchange trading system.

Nord Pool finds that the sale and two offers over the exchange trading system were intended to secure the price of ENOYR-08 at a beneficial level compared to the offer price in the OTC-market. The sale and the two offers gave an incorrect and misleading signal as to the supply of ENOYR-08 at € 45.30. The offers were intended to make influence on the seller's initial price level at € 45.40 to instead sell at € 45.30. Thus, Alfa Kraft made an economic profit through the purchase of 10 MWh in the same product series in the OTC-market.

On this basis Nord Pool has found that Alfa Kraft, according to section 5.1 of the Market Conduct Rules, has engaged in market manipulation by trading and offering over Nord Pool's electronic exchange trading system that had the intention to set the price of ENOYR-08 that deviates from the market value. Alfa Kraft has by its trading activity conducted transactions and orders to trade “which give, or are likely to give, false or misleading signals as to the supply of, demand for or price of a Listed Product,” according to Market Conduct Rules section 5.1, litra a.

Nord Pool finds a breach of Market Conduct Rules section 5.1 about market manipulation, to be a severe violation, as market manipulation in general will be negative for the confidence of the market. According to section 5.1 of the Market Conduct Rules Nord Pool has decided to impose a violation charge of NOK 700,000 towards Alfa Kraft.

For further  information, please contact Nord Pool ASA:  

Torger Lien, president and CEO, phone +47 6752 8070/+47 9188 8112

Lars Galtung, vice president communications, phone +47 6752 8080/+47 9821 4812  
About Nord Pool ASA 
Nord Pool ASA is Europe's largest power derivatives exchange and the only to provide trade in emissions allowances (EUAs) and carbon credits (CERs). The company has 415 members from 20 countries across a wide range of energy producers and consumers, as well as financial institutions. Nord Pool ASA embraces the wholly-owned Nord Pool Clearing ASA and Nord Pool Consulting AS subsidiaries. It is jointly owned by the transmission system operators (TSOs) Svenska Kraftnät and Statnett. The company has offices in Lysaker (Oslo), Stockholm, Helsinki and Amsterdam. 

For more information, please visit http://www.nordpool.com www.nordpool.com .