The Commodity Trading industry is on the cusp of transformation – and Digitization is at the heart of the change. By Cyrus Dadachanji, Partner, Midstream CTRM Practice, Infosys Consulting The Commodity trading industry is no stranger to change. From the birth of the independent trader in the 1990’s, to more recent changes wrought by the wholesale departure of the investment banks from the commodity trading scene, industry participants have long had to adjust to shifts in the trading landscape. Recent changes have seen the large independent traders acquire assets in a bid to move from pure-play financial traders to asset-backed traders, rivalling the once sole preserve of the industry majors. In addition to core trading participants, the Utilities industry too transformed. From traditional thermal energy consumers to renewable power generators... continue reading
Sophie Crisp, Manager, Risk and Compliance | 15 Jul 2016 Since the Brexit result, the focus for many has been on firms maintaining passporting rights under MiFID. Whilst this is undoubtedly the cornerstone of a firm’s ability to provide investment services throughout the EU, there are other regulatory considerations across the end-to-end provision of investment services. MiFID II legislation regulates conduct, ensures supervisory oversight and is central to primary and secondary market activity. Assuming the UK retains European Economic Area (EEA) membership, passporting rights will be retained under MiFID but we will lose the ability to directly influence future EU legislation, despite being subject to it. Without EEA membership, we will become a third country under MiFID and current passporting rights will be lost. MiFID II establishes two separate regimes... continue reading
At a recent gathering of CIO’s from some of the commodities traders it became clear that ‘near shoring’ is again the flavor of the month. Falling commodity prices over the last year across almost all major asset classes are making an impact. CIO priorities are going through a rationalization with the killer question on everyone’s lips “what is most important for the business”. OPEX budgets seem to be hit on average by a 10% – 15% reduction and CAPEX has seen further reductions. The common reactions seem to be: How do we maintain efficiency and service quality and reduce OPEX spend, utilization of cloud technologies seems to be the most popular CTRM systems, I sense a swing back to ‘buy’ away from ‘build’, primarily because currently it is not about... continue reading
There are now only a few days to go until the second, and final, reporting deadline under REMIT, on 7th April. From that date, all “REMIT” contracts, generally physical and financial gas or power trades (with some exceptions) need to be reported to ACER, the regulator, via an RRM (Registered Reporting Mechanism). There are an additional 90 days in which to “backload” trades and contracts that are already in place and still in delivery. This deadline comes just over two years after the EMIR reporting deadline, which covered all derivatives. For many in energy and commodities, EMIR was the first experience of a “banking style” reporting regime. Looking back it also seems like it was the start of a rather long marathon project in data discovery, extraction, cleaning, transformation and... continue reading
Researched and written by Paul Cassar of MJMEnergy Ltd – http://www.mjmenergy.com “Opponents of nuclear misread the science. It is safe and reliable. The challenge, as with other low carbon technologies, is to deliver nuclear power which is low cost as well. Green energy must be cheap energy.” – https://www.gov.uk/government/news/new-direction-for-uk-energy-policy On 18th November 2015 the UK Energy and Climate Change Secretary Amber Rudd revealed her plans for power generation for the nation. Amongst other things she plans to eliminate coal-fired power stations by 2025, increase gas-fired power stations and keep nuclear power stations central in the UK’s energy future. Current Nuclear Power Generation The UK currently has 15 nuclear reactors which generate around 18% of it’s electricity requirements. About half of these are due to be retired by 2025. Located at... continue reading
Commoditas Partners has published its key CTRM Recruitment findings based on data collected through interviews with hiring managers of leading trading and investment companies, system integrators, consultancies and software vendors. Key findings include: A shortage of skilled candidates is the biggest recruitment challenge Software Vendors and System Integrators are the biggest hirers of CTRM skills CTRM Solution Architects are the most in demand positions Openlink holds the highest CTRM market share for CTRM jobs The UK remain most dominant hiring country Recruitment Levels 46% of companies are looking to hire in 2016 compared to the actual 39% in 2015. For end-user hiring, agricultural and LNG companies feature high up in the list as they opt to build or buy TRM systems to enhance their trading and risk management capabilities. Oil... continue reading
Spike in LNG CTRM skills Over the last 18 months there’s been an increasing number of multi-national and national oil companies setting up trading hubs, such as: London, Houston and Singapore to service LNG spot cargo customers from Europe and Asia. This relatively ‘old school’ market is our most demanding sector within the energy space due to Asia and North West Europe scooping up increasing quantities of LNG for power generation. The main problem from a systems or ‘CTRM’ perspective, is there’s no off the self-solution available and so people are reverting back to new/bespoke builds. This is where the demand for good functional and business consultants are in high demand and will continue into 2016 as more companies jump into the LNG TRM band wagon. Treasury Management Systems activity... continue reading
By Ami Katschinski, Trayport’s Head of Global Commodities, offers his views on the future of the global iron ore market The iron ore markets have seen significant developments recently as global producers adapt to the changing demands of a slowing Chinese economy. Price fluctuations and speculations are abundant, with news of global players increasing production, lowering costs per tonne and pricing smaller producers out of the market. Ramifications are widespread, with Australia’s economic downturn [1] and currency devaluation being largely blamed on a decrease in iron ore trading with China. Finding the good news against this backdrop might seem like finding a needle in a haystack; however, traded volumes are on the rise, with iron ore the fastest growing commodity market in the world. And although prices of the physical... continue reading
Every good company knows that it’s most important asset is its staff, right? That a good hire can keep a business afloat through low points and help growth skyrocket during high points? So, as we see technology continue to evolve, it will play an increasingly important role in the way organisations should approach the talent search and hiring process. As an example, when LinkedIn popped up and online job applications first began to gain traction, they were seen as supplements to the traditional paper résumé and in-person interview. Today, the world of recruiting has gone digital crazy. From the résumé to the search to the interview, we’re moving toward a digital hiring model. Résumés will be displaced by constantly evolving representations of individual experiences, skills and aptitudes that exist purely... continue reading
In this month’s article, I would like to cover the involvement of social media, CTRM recruitment, and the growing demand for Metals CTRM talent. As the festive season nears and most hirers unwind their needs, the recruitment market gears up to service the flood of job seekers as they consider options moving into the New Year. With projects coming to an end, bonuses due, renegotiations and contracts coming to close, over 35% of employed professional will naturally consider a move leading into 2015. Recruitment & Social Media Facebook alone has over 1 billion active users. Twitter is upwards of 560 million and Linkedin 240 million. This makes for some very powerful numbers, and these numbers don’t even count several other linkedin equivalents, such as Mavern, Viadeo, Xing and OilPro. So,... continue reading
Introduction In a world of ever increasing globalisation, markets which were once discrete have become increasingly interlinked and none more so than the wholesale energy markets within Europe. In short, market abuse in one Member State potentially also affects the price of energy in other Member States – yet until recently, there was little definition on what was deemed as market abuse. As a result, the European Union judged it essential to set up a dedicated market integrity and transparency framework for the gas and electricity markets through an EU-wide monitoring scheme. This is how the Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT) was conceived. REMIT attempts to align the definition of market abuse across Europe and explicitly prohibits it, and has introduced the mandatory disclosure of inside... continue reading
Post CTRM Conference Feedback In this months article, I would like to echo some of the topics mentioned at this years CTRM Conference in London, which I must say was a great event, packed full of some very informative content. Firstly, I’d like to thank CTRM Center, ComTech Advisory and Commodities Now for the opportunity to speak at this year’s event. I’ve had some interesting post conference feedback confirming what we are seeing in the recruitment market is accurately inline with the some of the industry trends – validating our monthly recruiting trends can help keep you ahead of the recruiting trends curve. The most interesting and relevant discussions for me were those by Simon Hartland of Baringa Partners and Aviv Handler of ETR Advisory. Regulation Impact – EMIR, REMIT,... continue reading
Nowadays, the recruitment market has a somewhat tarnished reputation along with other services within this sector. A good parallel example are the system integrators with their “Land and expand” mentality, recruiters are known to “spray and lay” with minimal market focus or qualification process, significantly slowing down a job search and consuming more time when hiring. EnRisk is a 100% pure CTRM recruitment partner, offering the global job market the ability to access the best available jobs and resources at any given time. Having worked in this sector as a user and headhunter for over 10 years. I’ve combined a number of tools and methodologies to minimalize time and maximizing results when searching for your next job or hiring your next project team. As part of my monthly recruitment blog, I... continue reading
Last week the FCA published a final notice against Deutsche Bank fining them just over £4.7 million (after a settlement discount). The fine was for misreporting Equity CFD trades under MiFID for several years. The full notice can be seen here. The misreporting was inadvertent and the matter was rectified as soon as the mistake was uncovered. Never the less the fine was large. The question is, should that cause panic in the energy trading industry, where EMIR reporting has been going for just over six months? The fine was issued for getting the “buy/sell” flag the wrong way round, which is one data reporting field. In commodities, where there are so many complex fields, none of which are clear, it would seem to be easy to get something wrong and possibly incur a fine. And... continue reading
Article by Mr. Aviv Handler of ETR Advisory published 28th July, 2014. The acronyms “EMIR”, “REMIT”, “MiFID II” and others have now been flashing in front of us for quite some time, and in February we lived through the first go live of EMIR Trade Reporting. Many in the energy and commodities market found the requirements confusing and the lack of clarity made compliance harder than it could have been. There is plenty more still to come, causing a great deal of bewilderment. REMIT looms large, with the Implementing Acts, due in November, set to trigger deadlines in May and November 2015. And the confusion around EMIR is not finished, with low matching rates, continued lack of clarity over what commodities data really looks like. And so, many in the... continue reading
Published 14 January 2014 by Aily Armour-Biggs Electricity is the most volatile commodity in the world; and our markets are undergoing profound change. This means for a number of game changing reasons, for example, Electricity Market Reform, European Market Infrastructure Regulation and global commodity flow: the price of power in the UK market could become very volatile. As experts in energy trading and finance we would warn that the potential price risk in the UK power market has never been so high. Electricity Market Reform (EMR) represents the biggest change to UK power market since the Industry was privatised nearly 25 years ago. EMR is complex, being a mixture of policy changes, new markets and existing code reviews all interacting with each other. From our modelling of EMR we see... continue reading