Post financial crisis in 2008, governing bodies introduced several rules and regulations to bring transparency and security to financial markets. The US had taken the lead with many requirements for reporting introduced in 2013, followed by Europe and Canada who started to introduce their own rules. Soon Switzerland and Singapore will be on their way as well.
These established rules cover all derivatives including many swaps transacted in OTC markets and are now subject to centralized clearing. Commodity as an asset class is not excluded. Depending on the materiality of the speculative vs hedge activities rules are stricter for companies labeled as Financial Company and those that have a bona-fide function, the so-called Non-Financial Company.
DATA-DRIVEN REGULATORY PROCEDURES
“New data-driven regulatory procedures are adding pressure to compliance departments and IT to gain control and avoid paying high fines”.
Businesses active in the commodities industry continue to face increased regulatory oversight with requirements differing by region and country. Market participants are faced with a daily challenge; to keep a good overview of their performance and risk exposure. In practice this means having daily, actual and up-to-date insights in overall business positions, which is difficult, labor intensive and expensive. Especially as usually the underlying data needed resides in many different internal and external systems. As an outcome, keeping track of global positions in real-time is almost impossible.
THE NEED FOR A CENTRALIZED DATA REPOSITORY
TRADESPARENT can help you implement solutions by using a data-driven and risk-based approach by collecting and harmonizing all transaction and positions data in a centralized single source of truth data repository for complete and accurate monitoring and reporting. The TRADESPARENT software is non-intrusive and is flexible to handle any existing data landscape such as CTRM, ERP, financial systems or excel spreadsheets serving as the “glue” to connect all the systems together for transparent reporting.
Alexander Regnault, operations director TRADESPARENT comments: “Automated data management across all business levels is the key to simplified and painless compliance reporting.”
COMPLIANT AND IN CONTROL IN 3 SIMPLE STEPS
Given the range of requirements of the different asset classes, trade types and jurisdiction, TRADESPARENT advices to be in control and compliant in just 3 steps:
1. Build a centralized "Data Repository" for all derivatives and related physical trades on all Asset classes including both daily transaction and position data which collects, harmonizes and stores all transaction and positions data.
2. Activate TRADESPARENT’S regulatory monitoring and reporting modules depending on specific needs by jurisdiction;
• Daily/ Intraday TR reporting
• Exchange position limit monitoring
• Gross Value Threshold monitoring
• Insights relation physical and financial • incl. hedge/spec
• 204 /304 reporting
3. Leverage the centralized data repository to report to external stakeholders in a way you and the competent authorities desire!
lTRADESPARENT’s centralized data repository can also be leveraged for other needs and reporting requirements such as Positions & Performance, Risk and Margin reporting. You are in control.
TRADESPARENT is an integrated Data & Analytics Solution with its roots in the commodity industry. From the ground up the design has been geared towards data handling and then applying this data to a particular reporting solution. We ingest, normalize and apply a variety of checks to the trade data at the lowest denominator and have adapted the system to deal flexibly with the characteristics for financial and physical trade data. In addition, we have integrated the front-end reporting environment and designed it such that specific business logic can be applied at this stage of the process for the best fit with the evolving business requirements.
These fundamental design traits and experience in translating business requirements into systematized reporting have positioned us perfectly to deal with the derivative rules and regulations combined with our many other out-of-the box business solutions.
HAVE A QUESTION?
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REQUEST A DEMO:
Talk to one of our business experts to see how the TRADESPARENT’s solution can help your company to be compliant and in control within weeks rather than years! www.tradesparent.com/sign-up