Ofgem's position on SoLR and Trade Sales
May 29, 2020
SoLR and trade sales messaging from Ofgem
Ofgem has published two letters this month which we think all suppliers should have reference to.
Should there be any considerations within your business of a trade sale (from either side of the transaction) then the first letter, published on the 4th May, sets out Ofgem’s expectations of energy suppliers.
The regulator is primarily concerned with protecting the consumer and ensuring a good customer experience.
Suppliers considering a trade sale
If any suppliers are considering a trade sale in the current climate then Ofgem suggests the following:
- Early and proactive engagement with Ofgem and other third parties
- Observe the obligations under the Supply Licence Conditions
- Conduct robust due diligence which will help identify and mange any potential issues
- Manage and mitigate risks throughout the process
- Maintain good customer service standards
- Clear and coordinated customer communications so that customers are aware of what is taking place.
Ofgem regards a trade sale as preferable to regulatory intervention, which could lead to a SoLR scenario in the event of supplier failure.
ENSEK’s Regulation Team can offer consultancy services for any suppliers wishing to consider engaging in a trade sale transaction or for a tender opportunity following a SoLR event.
This will cover early advice and planning through to managing data migration, providing insights and ongoing support from our expert team.
Licensing requirements and expectations with Insolvency Practitioners
A further letter has been published, dated 7th May, to remind suppliers of their licence requirements and set expectations of Insolvency Practitioners to ensure customer protection is maintained.
It specifically sets out the obligations on Insolvency Practitioners, should there be a situation where an IP is involved with a supplier. It specifies the obligations under SLC 21BA with regards to back-billing.
Ofgem has engaged with a number of suppliers to ensure that their T&C’s are compliant with SLC 21BA.
ENSEK's Consulting Practice can provide support to ensure you achieve regulatory compliance and the correct controls are in place when working with an IP.
If you want to find out more about any upcoming developments or discuss how we can support you further please click the link below to contact the Regulations team for more information.
Have a query? Click the link and get in touch.