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Commodity Portfolio Management Research & Reports

Bridging the Gap in Asset Risk Management

London, 11 October 2012

Most energy trading and risk management (ETRM) systems have applied concepts and models that were originally developed on Wall Street. These useful tools manage risks associated with financial products or even physical commodities prior to actual delivery/generation, and are capable of providing a forward-looking view into, and helping to manage, out-months portfolio risks in terms of standard financial instruments.

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FIA EPTA welcomes Foresight working paper

Brussles, 31 August 2012

FIA European Principal Traders Association welcomes the conclusions of a UK government-commissioned study that EU proposals aimed at curbing automated trading could have a negative impact on the European economy. The Foresight project’s working paper on the review of the Markets in Financial Instruments Directive shares many of  FIA EPTA’s concerns about the proposed legislation, particularly regarding market-making obligations, order-to-trade ratios and minimum order resting times.

Read more: FIA EPTA welcomes Foresight working paper

An Undue Influence on Energy Markets

London, July 2012

Justin Bozzino: Too often, when high prices or market inefficiencies emerge in crude oil markets, “speculative influences” are blamed. My colleagues have written many times on why these arguments are fallacies – most recently here and here. Rather than heaping blame on “speculators” for market dislocations, lawmakers might want to consider the unintended consequences of policymaking.

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Evolving Investment Management Regulation

London, 17 July 2012

In its fourth annual analysis of global financial regulations, KPMG, the audit, tax and advisory firm, says investment managers continue to face daunting challenges brought on by a changing global regulatory environment, which is fraught with unanswered questions and an array of differing rules in each region.

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New methods for assessing hedge fund performance

 

London, 13 July 2012

In a newly-released research publication produced as part of the Newedge research chair on “Advanced Modelling for Alternative Investments,” EDHEC-Risk Institute has evaluated the performance of hedge funds through a non-linear risk adjustment of returns. This methodology is applied to various hedge fund indices as well as to individual hedge funds, considering a set of risk factors including equities, bonds, credit, currencies and commodities.

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Margin requirements for non-centrally-cleared derivatives

London, July 2012

Consultative document: The G20 Leaders agreed in 2011 to add margin requirements on non-centrally-cleared derivatives to the reform programme for OTC derivatives markets. Margin requirements can further mitigate systemic risk in the derivatives markets. In addition, they can encourage standardisation and promote central clearing of derivatives by reflecting the generally higher risk of non-centrally-cleared derivatives. The consultative paper published today lays out a set of high-level principles on margining practices and treatment of collateral, and proposes margin requirements for non-centrally-cleared derivatives.

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Who Sank the Boat?

London, 22 June 2012

EDHEC-Risk Institute Warns against "Speculative" Regulatory Proposals for Commodities Markets in Europe: In a new position paper, EDHEC-Risk Institute responds to a recent report* by Finance Watch on regulatory proposals for commodity derivatives markets in Europe. The paper describes an alternative narrative for what caused the recent commodity price rises and then notes what implications this narrative has for addressing Finance Watch's regulatory proposals.

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DTCC and EFETnet launch global commodity derivatives trade repository

New York, 19 April 2012

EFETnet B.V. and The Depository Trust & Clearing Corporation (DTCC) have announced that, following their successful pilot program launched in January as the first global repository for OTC commodity swaps, they have begun accepting trade submissions from commodity market participants into the new Global Trade Repository for Commodities (GTRfC). DTCC and EFETnet's industry governed low-cost model provides users the ability to submit trades to a single repository in order to fulfill reporting obligations to regulators globally.

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Global commodity ETP assets reach record levels

London, 18 April 2012

Commodity Exchange Traded Products (ETPs) around the world got off to a strong start in 2012, according to the latest edition of the Global Commodity ETP Quarterly by leading independent provider ETF Securities (UK) Limited. A combination of higher commodity prices and increased demand for ETPs pushed assets in worldwide commodity ETPs up US$19bn to US$189bn by the end of the first quarter of 2012 - the highest quarter-end level on record.

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Taking security over hedging accounts: the Tripartite Agreement

London, 8 March 2012

Reed Smith: Lenders in commodity finance will often require borrowers to hedge exposure to commodity price movements. Hedging can shield the borrower from the downside of a change in the price of a commodity and help ensure the borrower can repay the loan. It is common for the borrower to hedge its exposure using exchange-traded derivatives entered into with a clearing broker. Hedges cleared with UK or European-based brokers will usually be principal-to-principal trades between the broker and its client the borrower. The trades will be held in a futures brokerage account maintained with the broker.

 

Read more: Taking security over hedging accounts: the Tripartite Agreement