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Gearing up for the licensing of code administration

Published On: 5th February 2016

Never before has so much effort been focused on the topic of code governance. The work of the Competition and Markets Authority (CMA) has really fuelled the debate. Respondents to the CMA have proposed a range of solutions to the issues around code governance, from further cross-code working to introducing a ‘super code administrator’. There has even been a proposal to shift code governance control under a public body.

The CMA’s provisional decision is likely to reinforce its proposed remedy 18a: the licensing of code administration. Gemserv’s proposal, as set out in our thought leadership paper, Transforming Code Governance Arrangements, delivers benefits without the need to introduce more top-down regulation.
Licensing of code administration represents a significant shift in the code governance framework. I recognise there are benefits of such an approach; for example, it may lead to greater consistency across codes and help drive accessibility. Perhaps more importantly for some stakeholders, it will also resolve the perceived power vacuum that exists for Ofgem to be able to direct industry change.

To be effective, it will ultimately need to solve the range of issues that are troubling energy companies, including how best to give smaller code parties a louder voice within the governance framework.

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