Energy Trading Faces Regulatory Maze

Terry Flanagan

FinReg focuses on clearing and reporting of contracts.

Regulatory and technology are the driving forces behind energy trading and risk management.
“From a regulatory perspective in the energy space, Dodd-Frank is a key driver,” Emmanuel Doe, president of the Trading Solutions Group at Interactive Data, told Markets Media.

“The regulatory environment is driving standardization of energy contracts and calling for central repositories and databases for all energy transactions, both physical and financial, as well as for most transactions to be cleared to mitigate counterparty exposures,” said Doe.

Interactive Data’s FutureSource Energy Workstation is a global market data and analytics platform for the natural gas, crude oil, refined products and related cash and futures markets.

“FutureSource Workstation is a real-time market data platform that provides traders, brokers and analysts with energy prices, news and analytical tools to assist them in making trading decisions,” Doe said.

In addition, Interactive Data provides APIs and pricing and reference data to power ETRM platforms, as well as other middle and back-office systems.

Comprehensive energy trading risk management (ETRM) solutions deliver a single platform with the ability to capture transactions (physical and financial), view all exposures and risk analytics, execute logistics, manage positions, perform settlement and accounting functions, and meet compliance requirements.

By fully integrating all data and processes into one platform, companies realize improved business process efficiency and transparency across the front, middle and back office.

Trading and risk management for energy markets has unique attributes which make them from other asset classes.

“The key differentiator between trading and risk management for energy markets and other asset classes is that the underlying market is a physical market,” Doe said. “In the end, someone is making or taking physical delivery of oil, gas or power, so anything that affects the supply chain in turn creates price exposure in the markets.”

Related articles

  1. The blockchain-based platform is the first to connect metals and cash settlement networks.

  2. Morgan Stanley completed the acquisition of E*TRADE in 2020.

  3. Blackstone committed $400m to lead a strategic investment in Xpansiv in July.

  4. LME Looks to Chinese Growth

    The Managed Funds Association said LME has undermined confidence in its ability to oversee markets.

  5. CME Expands Metals Suite

    Lawsuits have been filed against the LME’s decision.