COMPLIANCE & RISK
Compliance & Risk
The institutional framework that supports a Swiss energy trading house.
Compliance and risk management are not, in our view, peripheral functions of an energy trading house. They are part of the operational fabric of the firm — woven into the daily workflow of trading, settlement, counterparty management, and external reporting. SANIA Power AG operates within the framework applicable to a Swiss-incorporated company conducting wholesale electricity and natural gas trading across Central and Central-Eastern Europe: European Union energy market regulation applicable through our subsidiaries, Swiss federal law applicable to the parent company, and the national supervisory regimes of the four jurisdictions in which the SANIA Group operates.
The principle that guides our approach is straightforward: every transaction we execute is auditable, traceable, and capable of being reconstructed — not because compliance demands it, but because trust between counterparties requires it.
Regulatory framework
The European component of our regulatory framework rests on three pillars — REMIT II, EMIR, and MiFID II — each addressing a distinct dimension of wholesale market conduct, supplemented by the national energy supervisory regimes of the markets in which our subsidiaries operate.
Wholesale market integrity — REMIT II
The Regulation on Wholesale Energy Market Integrity and Transparency, originally adopted in 2011 and substantially revised in 2024 as REMIT II (Regulation (EU) 2024/1106), prohibits insider trading and market manipulation in the EU’s wholesale energy markets, and obliges registered market participants to report their wholesale transactions to the EU Agency for the Cooperation of Energy Regulators (ACER) and to publish inside information that may materially affect prices.
SANIA Group entities are registered as market participants under REMIT in the jurisdictions in which they conduct wholesale trading. Wholesale energy transactions are reported to ACER — and, where applicable, to the Swiss Federal Electricity Commission (ElCom) — through Webware Internet Solutions GmbH. Webware acts as the Registered Reporting Mechanism (RRM) for the relevant SANIA entities. Our Energy Trading and Risk Management (ETRM) platform supports structured trade capture and prepares the reporting file. The file is then uploaded or forwarded manually to Webware, while the ETRM platform maintains the internal audit trail for reportable transactions.
Derivatives reporting — EMIR
The European Market Infrastructure Regulation (Regulation (EU) No 648/2012, EMIR, as revised by Regulation (EU) 2024/2987) governs the reporting and, in certain cases, the central clearing of derivative contracts. Wholesale energy trading houses are typically classified as non-financial counterparties (NFCs) under EMIR. SANIA reports its in-scope derivative transactions accordingly and monitors its derivative exposures continuously against the clearing thresholds established by the Regulation, using the same ETRM infrastructure that supports REMIT reporting — ensuring consistency between the two reporting streams.
Physical commodity trading — the MiFID II ancillary activity exemption
The Markets in Financial Instruments Directive II provides an explicit exemption for persons whose dealing in financial instruments is ancillary to their main commercial activity in physical commodities — the ancillary activity exemption under Article 2(1)(j). This is the standard regulatory position for European energy trading houses whose core business is the physical trading and supply of electricity and natural gas, and it is the position under which SANIA Power AG and its subsidiaries operate. We are not a MiFID-authorised investment firm and are not subject to the prudential and conduct-of-business regime applicable to financial services providers; the substantive risk and conduct controls we apply to our trading activity — which we consider proportionate to our scale and markets — are described in the sections that follow.
National energy regulators
Our trading activity is additionally subject to the national energy regulators of the markets in which we carry on licensable wholesale activity. SANIA Power s.r.o. holds electricity and gas wholesale licences in Slovakia, where the Regulatory Office for Network Industries (Úrad pre reguláciu sieťových odvetví, ÚRSO) is the supervisory authority, and gas wholesale licences in Austria (E-Control) and Hungary (Hungarian Energy and Public Utility Regulatory Authority, MEKH); SANIA Power AG also holds a gas wholesale licence for the Austrian market. In Switzerland, the wholesale electricity market is supervised by the Federal Electricity Commission (ElCom). Our Czech and Hungarian subsidiaries currently perform a support function within the group and do not carry on licensable wholesale activity; in markets where we hold no licence of our own, we trade through licensed local partners. The relationship with each regulator is managed by the local entity, with group-level oversight from the Zug headquarters.
The Swiss foundation
SANIA Power AG is incorporated in Switzerland — a deliberate institutional choice. Switzerland is not an EU member state, but it aligns its commercial and regulatory frameworks with European standards in most material respects, and it offers legal stability, predictability, and an internationally recognised standard of supervisory rigour. Our headquarters in Zug places us in one of Europe’s principal commodity trading centres, with access to the professional ecosystem — legal, accounting, banking, and audit services — that has developed there over decades.
Federal supervisory authorities
At federal level, the Swiss wholesale electricity market is regulated by ElCom, which also administers the Swiss counterpart of REMIT transaction reporting, within the energy policy framework set by the Federal Office of Energy (BFE/OFEN). The Swiss Financial Market Supervisory Authority (FINMA) regulates banks, insurers, and securities dealers; wholesale physical commodity trading falls outside FINMA’s scope, and SANIA Power AG is consequently not a FINMA-supervised institution — a position consistent with the MiFID II ancillary activity exemption under which our European trading activity operates.
The evolving Swiss wholesale market supervision framework
Swiss regulation is currently in a phase of development. Swiss-domiciled participants have to date submitted to ElCom, under the Electricity Supply Ordinance (StromVV), the same transaction data they report to the European authorities under EU REMIT. This is being replaced by the Federal Act on the Supervision and Transparency of Wholesale Energy Markets (Bundesgesetz über die Aufsicht und Transparenz in den Energiegrosshandelsmärkten, BATE), adopted by the Federal Assembly on 21 March 2025, which introduces registration, reporting, and market conduct rules for Swiss wholesale energy products aligned with the REMIT framework. The consultation on the implementing ordinance (VATE) ran from 28 January to 5 May 2026; the date of entry into force of the act had not been set at the time of writing. SANIA Power AG is prepared for this framework: our reporting infrastructure is already REMIT-compliant and our transaction capture already meets the data requirements of such reports.
Sanctions compliance — the SECO framework
The Swiss sanctions regime is administered by the State Secretariat for Economic Affairs (SECO). Switzerland does not automatically transpose EU sanctions, but SECO has consistently adopted them through dedicated federal ordinances on a substantially equivalent basis — including the measures introduced in response to the situation in Ukraine since 2014 and substantially expanded since 2022. SANIA applies the SECO regime at parent-company level and the respective EU regimes through its EU subsidiaries, with the unified group-level screening process described in Section 4.
Anti-money-laundering principles
The Swiss Anti-Money Laundering Act (AMLA) imposes due diligence and reporting obligations on financial intermediaries. Wholesale physical commodity trading is not, in itself, financial intermediation under AMLA, and SANIA Power AG does not conduct activities that would bring it within the scope of the Act. The principles that underpin AMLA — customer due diligence, source-of-funds awareness, beneficial ownership transparency — nonetheless inform our counterparty onboarding process across the group, as a matter of internal policy.
Data protection — revFADP
The revised Federal Act on Data Protection (revFADP), in force since September 2023, governs the processing of personal data by SANIA Power AG; the European Union recognises it as providing an adequate level of protection, permitting the free flow of personal data between Switzerland and the EEA. The personal data we process in wholesale trading is limited in scope — primarily contact and identification details of counterparty representatives — and is handled under revFADP standards at parent-company level and under the GDPR at subsidiary level. Further detail is provided in our Privacy Policy.
Market integrity and conduct
Wholesale energy markets function only to the extent that participants can trust the integrity of trading activity around them. SANIA’s approach combines the regulatory framework on which all participants depend with internal conduct principles applied across the group.
Inside information and market abuse prevention
Articles 3 and 5 of REMIT II prohibit, respectively, the use of inside information in trading decisions and any form of market manipulation, while Article 4 requires the public disclosure of inside information. SANIA does not own physical generation assets and is not, in the ordinary course of business, a primary source of inside information; we nonetheless maintain procedures for the recognition, handling, and — where appropriate — public disclosure of inside information that may reach us through commercial relationships. Where such information is identified, the affected commercial activity is suspended until the information has been publicly disclosed or has ceased to be inside information within the meaning of the Regulation.
Trade surveillance and controls
The trade lifecycle is structured around pre-trade and post-trade controls operating within the ETRM platform. Pre-trade controls validate that each transaction falls within the approved instrument list, counterparty list, and applicable position and credit limits — transactions that fail these validations cannot be entered into the system. Post-trade review is conducted by the risk management function as part of the daily portfolio review, with trade-level data captured in a manner that supports both regulatory reporting and internal surveillance.
Personal conduct
Staff with access to market-sensitive information are subject to internal restrictions on personal account dealing in instruments within the scope of their professional knowledge. Conflicts of interest must be disclosed to senior management on appointment and as circumstances change; gifts and hospitality are subject to internal thresholds and reporting requirements designed to prevent any appearance of improper influence.
Anti-bribery, anti-corruption, and internal reporting
SANIA does not tolerate any form of bribery, corruption, or improper inducement — in interactions with private counterparties, public officials, or intermediaries acting on the firm’s behalf. The relevant standards are those of the Swiss Criminal Code at parent-company level and the corresponding national legislation in the jurisdictions of our subsidiaries, together with the extraterritorial reach of the UK Bribery Act and the US Foreign Corrupt Practices Act where applicable. Staff are encouraged to report conduct inconsistent with these standards — to line management, senior management, or directly to the Board of Directors where the matter is sensitive — with confidential treatment and protection against retaliation.
Counterparty onboarding and credit risk
Every commercial relationship begins with a structured onboarding process and is supported, throughout its life, by continuous monitoring of the counterparty’s standing and of our credit exposure to it. The Head of Risk Management holds primary responsibility for this framework at parent-company level.
Know your counterparty — onboarding and beneficial ownership
Onboarding begins with corporate documentation establishing the legal existence, ownership structure, and authorised representatives of the counterparty: the commercial register extract, articles of association, identification of the ultimate beneficial owner (UBO), and of the persons authorised to sign trading agreements. Where the structure involves intermediate holdings, the documentation traces the chain to UBO level. The principles applied reflect the customer due diligence standards of the Swiss Anti-Money Laundering Act and the equivalent national frameworks — applied as internal policy rather than as a regulatory obligation specific to wholesale energy trading.
Sanctions and restricted counterparty screening
All counterparties — together with their beneficial owners, directors, and authorised signatories — are screened at onboarding against the sanctions lists relevant to the group’s activities: the consolidated EU list, the SECO-administered Swiss list, the UK (OFSI) list, the US OFAC SDN list, and the UN Security Council Consolidated List, using a continuously updated commercial screening database. Screening is not limited to onboarding: counterparties are re-screened on a continuous basis, any new hit triggers a formal review, and where a counterparty becomes subject to applicable sanctions, transactions are suspended and the matter escalated to senior management.
Credit risk assessment and limit framework
Each new counterparty undergoes a credit assessment before commercial activity begins, combining external sources — public financial statements and agency ratings where available — with an internal review of the counterparty’s profile, the proposed activity, and available credit-mitigating features (parent guarantees, letters of credit, payment terms, collateral). On this basis a credit limit is established within the internal limit governance framework, distinguishing unsecured limits from those requiring collateral or prepayment, and monitoring group-level concentration so that exposure to any single counterparty remains within parameters appropriate to the firm’s capital base.
Documentation, collateral, and ongoing monitoring
Trading relationships are documented under master agreements — most commonly the EFET General Agreements for electricity and for natural gas — establishing the contractual framework for individual transactions, including material adverse change clauses, financial reporting obligations, and collateral mechanisms where applicable. Exposure is monitored continuously through the ETRM platform against the applicable limits; significant changes in a counterparty’s standing trigger an out-of-cycle limit review, and where the risk assessment no longer supports a relationship, exposure is reduced in an orderly manner under the terms of the underlying agreements.
Market and operational risk management
Market risk and operational risk are addressed within a single, integrated framework overseen by the Head of Risk Management.
Market risk framework
The framework rests on a hierarchy of limits across the group’s trading books: position limits by instrument, market, and time horizon; value-at-risk (VaR) limits; and stop-loss thresholds that trigger the structured reduction of exposure once a defined loss has been incurred. Positions are marked to market continuously through the ETRM platform, profit and loss is computed and reviewed daily, and limit utilisation is tracked in real time with automated alerts and a structured escalation process. The portfolio is additionally subject to periodic stress testing — sharp price movements, disruption to cross-border flows, and historical replication of significant past market events — the output of which informs the calibration of the standard limit framework.
Operational risk and trade lifecycle controls
Each transaction is captured at execution into the ETRM platform and validated immediately against the approved counterparty list, instrument list, and applicable limits. Material actions — creation or amendment of counterparty master data, establishment or modification of credit limits, trade amendments outside the routine confirmation cycle — are subject to a four-eyes principle, requiring approval by a second qualified person. Reconciliations are performed daily between internal trade records, the records of exchanges and brokers, and the data submitted through the RRM for REMIT purposes, with discrepancies resolved before the start of the following trading day.
Limit governance and reporting
The limit framework is approved at senior management level and reviewed periodically; changes require the approval of the Head of Risk Management together with the Chief Executive, with material changes subject to Board-level oversight. The risk function produces daily portfolio reports for senior management and periodic summary reports for the Board of Directors, covering market risk utilisation, counterparty credit exposure, operational incidents, and matters arising from regulatory engagement.
Technology, business continuity and information security
The ETRM platform as a control environment
The proprietary, in-house developed ETRM platform described on the What We Do page is, from a compliance and risk perspective, the principal technical environment in which our controls operate: trade capture, validation, limit enforcement, position management, P&L calculation, exposure tracking, and the data flows supporting regulatory reporting all take place within, or in direct integration with, the platform. The platform is subject to a defined change control process — enhancements are tested in a separate non-production environment before deployment, and significant changes are documented and reviewed before they become operational.
Information security and cyber defence
Our information security approach follows the principles of internationally recognised information security management frameworks, applied at a level proportionate to our size and risk profile: least-privilege, role-based access controls; multi-factor authentication for systems handling commercial, financial, or reportable data; endpoint security, network segmentation, and encrypted communications. Technical controls are combined with staff awareness — periodic training on the recognition and handling of suspicious communications, and internal exercises that test it — with a defined internal response process for suspected incidents and external technical and legal support engaged where appropriate.
Business continuity and disaster recovery
Critical systems are designed with redundancy and backed up on a defined schedule, with periodic restoration testing. The trading and risk teams are equipped to operate from alternative locations when access to primary premises is restricted — a capability validated during the period of widespread remote working in 2020–2022 and maintained since. The framework is reviewed periodically against changes in the firm’s activity, technology environment, and regulatory expectations.
Governance and external oversight
SANIA’s governance arrangements balance the practical realities of an owner-managed enterprise — clear accountability, rapid decision-making, alignment between strategy and operations — with the institutional standards expected of a Swiss-incorporated trading company active across multiple European jurisdictions.
Internal governance structure
SANIA Power AG is a joint-stock company (Aktiengesellschaft) registered in the Commercial Register of the Canton of Zug. Its Board of Directors holds the non-delegable strategic, supervisory, and accountability responsibilities set out in Article 716a of the Swiss Code of Obligations: the ultimate direction of the company, the organisational structure, the design of the financial control framework, and the appointment and supervision of executive management. Day-to-day management is conducted by the senior team described on the About page, which also exercises group-level oversight of the subsidiaries in Switzerland, the Czech Republic, Slovakia, and Hungary.
Risk and compliance reporting lines
The Head of Risk Management reports directly to the Chief Executive, with independent access to the Board of Directors for any matter requiring it — a deliberate line that keeps the risk function independent of the commercial business while remaining effective at its operational tempo. The principles of separation between commercial activity, risk oversight, and external assurance — the three lines of defence — are applied at a level proportionate to the firm’s size. Within the EU subsidiaries, local compliance arrangements appropriate to each jurisdiction are maintained under the overall oversight of the parent-company Head of Risk Management, with escalation to senior management and, where required, to the Board.
External oversight — audit and regulatory engagement
Reflecting its current size and ownership structure, SANIA Power AG operates under the statutory audit exemption available under Swiss law to enterprises of its scale (Articles 727–727a of the Swiss Code of Obligations). As part of the group’s continued institutional development — and in preparation for the next phase of its growth — the company has resolved to introduce an external audit of its annual financial statements from the 2027 financial year.
Independent external oversight of our trading activity is, at the same time, already substantial and continuous: the trading companies of the SANIA Group operate under continuous energy-regulatory supervision — the Federal Electricity Commission (ElCom) in Switzerland, the Regulatory Office for Network Industries (ÚRSO) in Slovakia, and, in respect of the Austrian and Hungarian gas wholesale licences, E-Control in Austria and MEKH in Hungary — and report their wholesale transactions to ACER on a continuous basis through a Registered Reporting Mechanism under the REMIT II framework. Counterparties requiring financial or corporate documentation beyond what is published here are invited to contact us; such information is shared bilaterally in the ordinary course of business.
Continued institutional development
The framework described on this page reflects the SANIA Group as it currently operates: a focused, owner-managed energy trading house supported by professional governance, structured controls, and the technology and reporting infrastructure of a modern European market participant. As the group prepares for the next phase of its development, that framework will itself continue to evolve — the governance, risk, and compliance arrangements appropriate to a firm of our current scale will, in due course, require extension and formalisation as the business grows. We approach this evolution as we approach the underlying commercial activity: through structured, considered steps that build durable institutional capacity, rather than through abrupt change.
For an overview of our commercial activity, please see What We Do. For the institutional history and senior management of the group, please see About. For specific enquiries, please email office@sania-power.com, using the appropriate subject prefix listed on our Contact page.