SUBSCRIBER NOTE: Platts proposes reduction in incrementability changes in Cash BFOE spread MOC

S&P Global Platts is proposing to reduce the incrementability with which companies can change bids and offers within the Cash BFOE cargo and partial spread Market on Close assessment process effective September 3, 2018.

Currently, a company bidding or offering a Cash BFOE cargo and partial spread in the Platts MOC can move an indication by up to 3 cents/barrel every second.

Under this proposal, incrementability would be reduced, meaning that a company could only move an indication by 1 cent/b every second.

This proposal only applies to Cash BFOE spread indications and not to Cash BFOE outright price indications where incrementability will remain at 3 cents/b. Additionally, the repeat time for Cash BFOE cargo and partial spreads and Cash BFOE outright bids and offers will remain at 10 seconds.

Following the introduction of implied indications functionality in the Platts MOC in September 2017, Platts has observed an increase in the efficiency of transaction execution.

Platts believes that, as a result of this trend, the current incrementability allowed to change a Cash BFOE spread bid or offer does not sufficiently test market value at all levels and could lead to an increase in "gapping" wherein an indication moves too quickly to adequately test value.

Please send any comments and feedback by June 29, 2018 to europe_crude and pricegroup

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.

Platts will consider all comments received and will make comments not marked as confidential available upon request.