Regulatory Engagement and Market Issues

On September 17, 2015 the International Organization of Securities Commissions (IOSCO) announced that the price reporting agencies (PRAs) have made the IOSCO Oil PRA Principles an "integral part" of their price assessment practices and that IOSCO saw no need to continue its annual review of the Principles' implementation.

IOSCO said: "Given the progress that has been evidenced to date, the commitment by the four main PRAs to continue adhering to the PRA Principles, and to undergo independent external assurance reviews, IOSCO, the IEA, IEF and OPEC do not believe that further annual implementation reviews will be necessary at this time". The full report can be found by clicking this link.

S&P Global Commodity Insights remains committed to ensuring its Platts price assessment processes continue to fully align with IOSCO's PRA Principles across all commodities and will continue to retain an independent accountancy firm to conduct voluntary reasonable assurance reviews of its alignment to the PRA Principles.

METHODOLOGY REVIEW

At a minimum, S&P Global Commodity Insights reviews all methodologies annually to ensure they continue to reflect the physical markets under assessment. Our Platts Price Assessment regularly assesses the relevance of methodologies through continuous contact with the market. Feedback on methodologies is always welcomed by S&P Global Commodity Insights. If you have any comments, please contact the Price Group. Please indicate if you wish your comments to remain confidential.

REVIEW & APPROVAL PROCESS

Platts Price Assessment follows a clearly defined process for introducing or making changes to its methodologies. This process is based on full transparency and communication with industry stakeholders aimed at gaining market acceptance for any proposed introduction or changes to methodology.

Once Platts identifies the need for a methodology change:

• Platts assigns an individual as owner of the entire change process. This individual is accountable for ensuring all processes are correctly followed.
• Platts publishes a proposal in the form of a Subscriber Note and invites feedback over a specified time period. The timelines may vary depending on the nature of the change.
• After feedback is received and collated, Platts considers the information, makes a decision and publishes a Subscriber Note. If Platts decides to proceed with the change, Platts provides additional opportunity for feedback before the change is implemented.
• Any written feedback received by Platts in relation to a methodology consultation that has not been designated as confidential will be made available to users upon request.
• Any written feedback on methodologies that has not been marked as confidential can be made available to users upon request

Platts categorizes methodology changes into types. (See table below.) All methodology changes are formally communicated to the market through Subscriber Notes.

Factors, including external factors beyond the control of Platts, may necessitate changes to, or the cessation of, the benchmark. Such factors may include changes in physical market conditions that could materially impact the parameters of an assessment.

Platts does not sponsor, endorse or market any specific financial product or provide investment advice. Users of Platts benchmarks should nevertheless be advised that changes to, or the cessation of, the benchmark may have an impact upon financial instruments that reference the benchmark and users should contact the relevant product provider or fund manager for more information.

Platts is committed to providing advance notice in a clear time frame that gives users sufficient opportunity to analyze and comment on the potential impact of such proposed changes. Time frames vary depending on Platts analysis of the overall circumstances of a particular change.

Methodology changes that materially alter an assessment and require an update to the methodology specification are preceded by extensive bilateral discussions with market stakeholders. Routine changes, such as seasonal quality or pipeline cycle changes, time-rolling assessments, or clarifications, generally do not materially alter an assessment.

Platts may hold open public forums in which material methodology changes and feedback are presented, and at which further feedback may be given.

When a Platts assessment ceases to be relevant to the marketplace, Platts generally will provide at least six months' notice of its intention to discontinue an assessment, although this timeline can be shortened to three months when Platts expects the market impact to be negligible. If an unforeseen event causes a severe disruption in a particular market, the timeline for discontinuing an assessment (sometimes on a temporary basis) may be shortened even further.

On occasion, Platts may need to respond urgently to changing market conditions, perhaps precipitated or warranted by a serious event or market situation. Such changes are also communicated in a Subscriber Note setting out what the issue is and what changes are to be made.

If you wish to comment on a proposed change, please send an email to the address listed in the relevant Subscriber Note and clearly indicate whether you wish your comments to remain confidential.

• Platts Aluminum Midwest Premium Explained
• An Introduction to S&P Global Commodity Insights Platts Price Assessment Processes and Methodologies
• An Introduction to S&P Global Commodity Insights Platts Market-On-Close Process in Petroleum
• S&P Global Commodity Insights Role in the Markets: Video
• Introduction to S&P Global Commodity Insights Platts Market-On-Close in Oil: Video
• Important Distinctions Between LIBOR Rate Setting and Oil and Energy Market Price Reporting - November 19, 2014
• S&P Global Commodity Insights and Energy Markets