Platts is a leading global provider of energy, petrochemical and metals information and a premier source of benchmark price assessments for those markets. Platts has long advocated greater information transparency in oil and other energy commodity markets and has pioneered highly innovative methods of price discovery in such markets.
In today’s era of heightened public interest in price reporting organizations, Platts has been the object of extensive regulatory and media attention. Platts’ aim is to build awareness among various stakeholders of its role in the commodity markets, its price assessment processes and how they protect against distortion of its price assessments. Here you will find facts about Platts as well as Platts’ responses to several regulatory consultations and media reports.
IOSCO Principles for Oil Price Reporting Agencies
As part of its commitment to transparency and integrity, Platts engaged Ernst & Young (EY) to conduct an independent assurance review of its alignment with the IOSCO Principles for Oil Price Reporting Agencies (PRA Principles.) The PRA Principles, which set standards for governance and control systems, were introduced by the International Organization of Securities Commissions (IOSCO) and endorsed by the G20 in October 2012.
EY’s reasonable assurance review – the highest standard for this type of review – confirmed that Platts’ strong governance structure and operational processes were fully aligned with IOSCO’s PRA Principles.
IOSCO issued its PRA Principles following an extensive industry consultation on the "Functioning and Oversight of Oil Price Reporting Agencies." Platts participated in this consultation, submitting comments to IOSCO in March 2012 and simultaneously issuing a letter to the energy industry expressing its views.
IOSCO Principles for Financial Benchmarks
In 2013, Platts responded to two IOSCO board-level consultations on financial benchmarks and issued a press release following IOSCO’s July publication of its Principles for Financial Benchmarks.
Proposed European Union Legislation on Financial Benchmarks
On September 18, 2013, the European Union introduced proposed legislation regarding financial and commodity benchmarks. Platts has responded to media queries regarding the proposed legislation.
European Commission Review of Oil Pricing
On May 14, 2013, the European Commission (EC) informed Platts that it had initiated a review of several oil companies’ participation in Platts’ price assessment process. Platts is cooperating fully with the European Commission's review and is not accused of any wrong doing.
Distinctions Between LIBOR and Oil Price Reporting
False parallels are often drawn between oil and energy market price reporting and the generation of the British Bankers Association's London Interbank Offered Rate (LIBOR) indices. There are no similarities.
Rebuttal of June 19, 2013 Wall Street Journal Article
On June 19, 2013, The Wall Street Journal published a front-page article, “Traders Try to Game Platts Oil-Price Benchmarks,” which contained quotes from mostly unnamed traders who claimed that they profited by reporting above or below market prices in Platts’ price assessment process. The article falsely implied that Platts’ price assessment processes had been compromised. Here are Platts' responses:
Platts and Energy Markets
Platts is an independent information and services provider. Our role as an impartial publisher is to observe, analyze and report on the markets. We have no stake in the value of the commodities we cover. Participation in our news gathering and price assessment processes is voluntary, as is the use of our information. Our aim is to protect the integrity of our price assessment processes and to publish information that is useful to our customers and helps the markets operate with greater transparency and efficiency.
The quality of data inputs – not the quantity – is of primary importance in developing a price assessment that represents true market value. To maintain the integrity of our price assessments, we employ structured processes underpinned by rigorous, well-defined guidelines which are publically available at Platts Methodology & Specifications.
Transparency is of paramount importance to price discovery, particularly given the complexity and non-standardized nature of physical oil markets. For Platts, transparency means full disclosure of our methodologies and of the data underlying our price assessments. The transparency of Platts’ Market-On-Close oil price assessment process, including identification by company name of all submitted bids, offers and transactions, is unparalleled.
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