In July 2019, MOSL presented a proposed framework to Ofwat and the Panel to manage and co-ordinate the development of a market-wide bilaterals solution.
Improving bilateral iterations between wholesalers and retailers was identified as a key market friction caused by a lack of consistent approach in the market, leading to inefficiencies in delivering a seamless customer experience. The provision of a bilateral solution was outlined as a priority focus in MOSL’s Business Plan 2019/20 and on 12 July 2019, Ofwat published its Authority timetabled change proposal to enable MOSL to progress with a solution to address the issues experienced through poor bilateral transactions.
Due to the nature and complexity of bilaterals, Ofwat agreed to a bespoke approach to governance to encourage greater collaboration with trading parties, allowing them to input and test solutions at key project milestones.
Ofwat have tasked MOSL with -
- Investigating the problems with bilateral transactions, including concerns about the impact current mechanisms for undertaking bilateral transactions are having on the market
- Where necessary, developing a solution that will encompass the standardisation of bilateral transactions that are supported by a technology platform
- Enabling trading parties to test the technical aspects of a solution at appropriate milestones through the provision of a suitable test environment, and prior to the submission of the final proposal to the Panel by Ofwat.
- Developing, as appropriate, code modifications to enable the implementation of a solution into the Wholesale Retail Code (WRC).
The solution will look to standardise bilateral transactions across the market, supported by a technology platform. The solution may also require potentially wide-ranging amendments to the Wholesale Retail Code (WRC). We will work closely with trading parties, the Panel and Ofwat to ensure code amendments are considered and assessed as part of this project.
In the next few months we will be further defining the scope of the technology elements and of the code amendments required to drive the project into the next phase of work. We will be creating a comprehensive communication plan to ensure trading parties are kept up-to-date throughout the project through various communications, forums and through engagement with their Portfolio Managers.
We are also currently facilitating briefing sessions with trading parties up until the end of September. If you are interested in taking part in one of these briefing sessions, please email MOSL’s Transformation Director, Chris Poulton or speak to your Portfolio Manager.