Commodity Management Blog

Innovative Ideas and Thought Leadership for Volatile Commodity Marketplace

BarclaysThe Federal Energy Regulatory Commission (FERC) made headlines after it issued a record fine of $453M against Barclays PLC and several of its power traders. FERC stated that the bank manipulated energy prices in California and other western markets between November 2006 and December 2008. The agency is also working towards a similar settlement with J.P. Morgan Chase.

When I read the news, the dollar amount of the fine wasn’t what resonated. The fact that it was issued for manipulation that began over 7 years ago did. FERC doesn’t have to abide by a statute of limitations, and other agencies often use revisions to extend any that do exist. Energy traders are exposed to heightening levels of regulatory risk with every passing day, and FERC may be the least of their concerns.

The introductions of Dodd-Frank, EMIR, MIFID, and REMIT, among others, have elevated complexity in U.S. and E.U. power and gas markets. Rules within each regulation continue to evolve, making it extremely difficult to interpret them. Traders cannot keep up. The task of capturing necessary information and knowing where to send it becomes more convoluted as more parties become involved in each transaction and the number of transactions processed increase. The only effective means to ensure compliance is to partner with an energy trading and risk management (ETRM) provider to implement a regulatory solution.

Triple Point Technology’s ETRM, Commodity XL, has dedicated modules to meet the stringent requirements of Dodd-Frank and regulations in the E.U. Triple Point also employs dedicated experts to remain vigilant in proactively developing and adapting its enterprise software to meet the demands of regulators so your company can focus on making profitable trading decisions. Contact us at [email protected] to learn more.

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