On 7 July 2026, the National Energy and Regulatory Commission (NEURC) adopted Resolution No. 1089 “On Approving the Procedure for the Appointment, Suspension, Termination and Monitoring of Nominated Electricity Market Operators” (Procedure). The Procedure implements recently adopted market coupling legislation and establishes the regulatory framework for designating a Ukrainian nominated electricity market operator (NEMO) responsible for organising trading with EU electricity markets within Single Day-Ahead Coupling (SDAC) and Single Intraday Coupling (SIDC).
Although the Procedure does not immediately introduce market coupling, it represents one of the first key implementing measures required for Ukraine’s integration into the EU internal electricity market.
The Procedure is available (in Ukrainian) at this link. CMS’s detailed analysis of the adopted market coupling legislation is available at the link.
Key takeaways
The most important features of the Procedure include the following:
- it establishes the first comprehensive Ukrainian procedure for designating Nominated Electricity Market Operators (NEMOs);
- it allows both Ukrainian operators and EU/Energy Community NEMOs (following passporting) to operate in Ukraine;
- it introduces detailed eligibility criteria largely based on the EU Capacity Allocation and Congestion Management (CACM) Regulation;
- it establishes ongoing regulatory monitoring by NEURC;
- it provides mechanisms for suspension and termination of NEMO status;
- it permits delegation of central counterparty (CCP) functions under specified conditions; and
- it forms one of the first secondary acts implementing market coupling legislation and preparing Ukraine for participation in SDAC and SIDC.
Overview
Background
In April 2026, Ukraine adopted market coupling legislation implementing the EU Electricity Integration Package and establishing the legal framework for coupling Ukraine's electricity market with those of the EU and Energy Community Contracting Parties.
One of the core elements of this reform is the introduction of the NEMO concept. Under EU law, NEMOs are responsible for organising day-ahead and intraday electricity trading and operating the common algorithms used for cross-border electricity trading under SDAC and SIDC.
Without at least one designated NEMO, Ukraine cannot participate in the European market coupling process. The adoption of this secondary legislation constitutes one of the first practical implementation steps for the successful market coupling.
Eligibility for NEMO appointment
The Procedure permits two categories of operators to obtain NEMO status.
Ukrainian entities holding one of the following licences:
- an electricity market operator licence issued by the NEURC; or
- an organised commodity market operator licence.
Foreign NEMOs already designated within an EU member state or another Energy Community Contracting Party may operate in Ukraine following a separate authorisation procedure (i.e. passportisation). The NEURC is expected to adopt the passportisation procedure among other market coupling by-laws.
The Procedure expressly provides that one or more NEMOs may operate within the same Ukrainian bidding zone.
Appointment procedure
Applicants must submit an application together with extensive supporting documentation demonstrating compliance with the statutory designation criteria.
The NEURC is required to decide whether to appoint the applicant within three months.
The Procedure introduces administrative procedure safeguards, including:
- correction of incomplete applications;
- requests for additional information;
- reasoned refusals; and
- judicial review of refusal decisions.
An initial appointment is granted for four years, after which the NEMO may be designated on an ongoing basis.
Appointment criteria
The Procedure contains a detailed set of designation criteria broadly reflecting Article 6 of the EU CACM Regulation.
Applicants must demonstrate the following:
- sufficient financial and operational resources;
- appropriate IT infrastructure;
- independent accounting;
- functional independence;
- equal treatment of market participants;
- market surveillance mechanisms;
- transparency arrangements;
- ability to perform central counterparty functions; and
- cooperation arrangements with TSOs and foreign NEMOs.
Ongoing regulatory supervision
The Procedure establishes ongoing regulatory supervision similar to that applied within the EU internal electricity market.
NEURC may review ongoing compliance on the basis of the following:
- reports submitted by NEMOs;
- information requested by the regulator;
- complaints from market participants;
- information received from foreign regulators;
- information from the Agency for the Cooperation of Energy Regulators (ACER); and
- information from the Energy Community Secretariat.
Suspension and termination
Where a NEMO no longer satisfies the designation criteria, the NEURC may require deficiencies to be remedied.
If non-compliance persists:
- passported foreign NEMOs may have their Ukrainian activities suspended;
- Ukrainian-designated NEMOs may have their designation revoked.
The Procedure also establishes extensive notification obligations between the NEURC, foreign regulators, the Energy Community Secretariat, the Energy Community Regulatory Board, ACER and the European Commission where appropriate.
Delegation of central counterparty functions
One notable feature of the Procedure is the possibility for a NEMO to delegate CCP functions to a licensed third party.
Such delegation requires prior approval from the NEURC, and the third party must be capable of performing those functions to standards equivalent to the NEMO.
This flexibility mirrors arrangements already used in several EU electricity markets where clearing functions are performed by specialised CCPs rather than the NEMO directly.
Practical implications
The Procedure is more than an administrative designation process. It establishes one of the essential institutional building blocks required before Ukraine can participate in European electricity market coupling.
Following adoption of the Procedure, Ukraine must proceed implementing a broad package of secondary legislation governing, among other things:
- passporting of EU NEMOs;
- market rules;
- price coupling;
- balancing and cross-border trading.
Only after completion of these reforms will Ukraine be able to participate in SDAC and SIDC.
Conclusion
The adoption of the NEMO appointment procedure marks one of the earliest visible regulatory milestones in Ukraine’s market-coupling roadmap. While the procedure will not immediately enable cross-border coupled trading, it creates the legal mechanism for Ukraine to designate its NEMOs and recognise EU NEMOs, which are prerequisites for participation in the European day-ahead and intraday electricity markets.
Together with future implementing acts on market rules, pricing, balancing and technical interoperability, the Procedure forms part of the regulatory architecture required for Ukraine’s planned integration into the EU internal electricity market in 2027.
For market participants, the Procedure provides long-awaited regulatory certainty regarding the designation of NEMOs and confirms that Ukraine is moving from legislative reform to practical implementation of electricity market coupling. While additional implementing legislation remains necessary, the Procedure establishes the institutional framework for future cross-border electricity trading arrangements.
For more information, contact your CMS client partner or the CMS experts who contributed to this article.
