Electronic Confirmation Matching – a necessity for risk mitigation and efficient back office processes
Once OTC energy traders have successfully conducted a trade of power, gas or CO2 certificates, they have to exchange their trade parameters to make sure that there is no misunderstanding e.g. on price, quantity or delivery period. Since manual confirmation matching is very inefficient for risk mitigation and can create a huge operational overhead, fully automated confirmation matching is a crucial mechanism for trading companies.
On behalf of Equias, PONTON developed a trade confirmation matching service, which is used by over 150 European trading organisations for wholesale power, gas and CO2 certificates. This electronic Confirmation Matching (eCM) process is based on the CMS platform that automatically matches off 99% of the industries OTC trade confirmations. It also supports back office users in manually dealing with mismatches using a web portal. PONTON is involved in process standardisation, system development, regular maintenance, technical operation and support as well as in designing future add-on services for the user community.
Regulatory Reporting – PONTON is your one stop shop for integration and compliance services
Within the last decade the European Union has put several regulatory frameworks into force to increase market stability and investor protection through transparency mechanisms and harmonisation of processes, data formats and protocols. Since B2B integration activities and compliance services are in PONTON’s genes, we have developed a electronic Regulatory Reporting (eRR) service for our longstanding business partner Equias, which is by now used by over 1,500 trading companies and venues across the European market. For regulators, the eRR service provides regulatory oversight, which is essential to ensure the integrity of traded markets. The eRR function represents the largest European reporting hub, cooperating with energy traders and repositories such as REGIS_TR, DTCC, UnaVista, ACER, and ElCom. PONTON has proven over years to be the right partner, facing the many requirements of collecting and reporting every order, trade and transaction lifecycle event in the European energy market is a significant challenge.
Trade Monitoring – Identify suspicious trading patterns before the regulator does.
Regulations on wholesale energy markets, namely the Market Abuse Regulation (MAR), dictate a culture of monitoring trading behavior amongst participants in European energy markets. To cover this obligations, PONTON has developed a compliance solution implementing their monitoring obligations in a consistent way, which is configurable to each company’s unique situation and approach to trade monitoring. Just like the eCM and the eRR service, this electronic Trade Monitoring (eTM) system is offered by Equias.
Trade Monitoring – Identify suspicious trading patterns before the regulator does.
EMIR – the European Market Infrastructure Regulation (EU 648/2012) is an EU regulation for the regulation of OTC derivatives. The regulation includes requirements for reporting of derivative contracts and implementation of risk management standards. The core of the regulation is the obligation of market participants to clear their standard OTC derivatives transactions via a central counterparty and to report these transactions to a trade repository. The objective of the legislation is to reduce systemic counterparty and operational risk, and help to prevent future financial system collapses.
REMIT – the Regulation on Wholesale Energy Market Integrity and Transparency (EU 1227/2011) is an body of European legislation to increase the transparency and stability of the European energy markets while coping insider trading and market manipulation. Within the European Union REMIT has been put into force in 2011. The EU authority ACER is responsible for monitoring and regulating the energy markets under REMIT.
MiFID II – the Markets in Financial Instruments Directive (EU 2014/65) is a European directive aimed at harmonising financial markets in the European single market. The directive is the basis of the EU’s regulation of financial markets seeking to improve their competitiveness by creating both a single market for investment services and activities and to ensure a high degree of protection for investors.
MAR – the Market Abuse Regulation (EU 596/2014) is an EU regulation to combat insider trading and market manipulation on the European financial markets. The regulation prohibits insider trading, the unlawful disclosure of inside information and market manipulation. It defines uniformly and bindingly prohibited trading throughout the EU and distinguishes it from legal trading.
Equias – innovative, cost-effective solutions for the energy-trading community
Equias was created in 2018 through a management buy-out from EFETnet, a wholly owned subsidiary of EFET (European Federation of Energy Traders). Equias bundles central services for participants in wholesale energy trading in order to support them cost-effectively and standardise back office and compliance processes (such as regulatory reporting) by outsourcing. PONTON is the central service provider for the design and development of CMS functions, deployment, operation, second-level helpdesk, and integration support in the area of data messaging. Equias itself operates a first level helpdesk in the UK.
