Index Governance

All inputs are sourced from our commodity trading platform in a fully transparent and auditable way.

All prices are for a standard specification, so that prices are fully comparable and no subjective normalisation is required.

All inputs are subject to qualifying criteria, including:

• Excluding the current month to prevent the distorting effect of very prompt cargoes
• Excluding pricing points captured outside the liquidity window
• Excluding prices posted for less than 15 minutes
• Excluding bids lower than 4% of the best bid and offers higher than 4% of the best offer

Our rules of operation support the reliability of our indices, such as:

• Parties are anonymous on screen
• Related parties are prohibited from trading with each other
• Participants must be able to trade with a minimum number of counterparties to ensure that all orders have a reasonable chance of being transacted
• Changes to trading permissions are managed by our team to prevent credit-based gaming

Our brokers are trained to detect suspicious activity on the platform, for example:

• Inverted markets
• Trading through the best bid or offer
• Optionality limiting the potential for an order to be traded
• Manipulation of credit arrangements to limit the potential for an order to be traded
• Producer-to-producer activity causing an unusual rise in prices (or vice-versa for end-users)
• Bid/offer activity concentrated at times of low liquidity

Our brokers can remove off-market bids and offers from the screen and must report suspicious activity to the Compliance Oversight Officer (COO).

The Compliance Oversight Officer can:

• Exclude an input from the calculation if it is considered to be derived from potentially suspicious activity
• Issue formal warnings for suspected market misconduct
• Suspend participants from trading on the platform

The COO will submit reports of suspicious activity to the FCA where necessary. S/he is advised by a Compliance Committee staffed by legal and compliance specialists.

The Benchmark Oversight Committee reviews instances where management has decided to intervene (or not) in the benchmark formation process – for example, by removing a pricing point from the index calculation.

The committee members have experience of commodity markets and market abuse regulations but stem from outside the industry, so they are truly independent from the decisions they reviews.

We are regulated by the UK's Financial Conduct Authority. Any abuse of physical markets with a bearing in index formation is a criminal offence.

We comply with the IOSCO Principles for Financial Benchmarks. This sturdy control and oversight framework ensures the quality and integrity of our index-related activities.

Every year, we commission an independent regulatory compliance consultancy to assess our compliance with the Principles and with our own stated procedures for managing our benchmarking activities.