Regulatory Engagement & Market Issues

Regulatory Engagement

European Benchmark Regulation

The European Union has finalized its Benchmarks Regulation, which was published in the Official Journal on June 30, 2016. The new Regulation aims to address conflicts of interest, governance controls and related issues in the benchmark administration process. The substantive provisions applicable to S&P Global Platts are set to become effective January 1, 2018.

S&P Global Platts has actively engaged with European policymakers and regulators on the Benchmarks Regulation since 2012. As a result of the willingness of European policymakers and regulators to engage in a meaningful way with a wide range of stakeholders during the process, the Regulation takes a calibrated approach. Commodity benchmarks, for example, receive specific treatment under a separate Annex II. The substantive provisions of that Annex are consistent with and heavily influenced by the IOSCO PRA Principles.

S&P Global Platts has adhered to the IOSCO PRA Principles since 2013. This helps to ensure an internationally-consistent approach which minimizes market disruption while meeting regulatory objectives. As part of this, S&P Global Platts will continue to retain an independent accountancy firm to conduct voluntary reasonable assurance reviews of its alignment to the PRA Principles.

Like other legislation in Europe and many other jurisdictions around the world, The Benchmark Regulation (level 1 text) is supplemented by implementing legislation, which further clarifies the requirements of the Regulation. On March 30, 2017, ESMA published its final draft RTS for Level 2 measures, which are currently in the process of being ratified by the European Parliament and European Council.

In the meantime, S&P Global Platts has launched an initiative to prepare for implementation. The Regulation will require Platts to obtain registration or authorization by an EU National Competent Authority (NCA), and Platts is interacting with NCAs to understand their plans to supervise administrators under this new Regulation, and has been actively engaged with the FCA in this regard.

While the Benchmarks Regulation becomes applicable from 1 January 2018, ESMA has provided additional guidance on the transitional provisions contained in the Regulation to allow existing benchmark administrators to provide existing and new benchmarks for use in the European Union during the transitional period (i.e., through 1 January 2020).

Because the EU Benchmarks Regulation will become effective before the completion of negotiations between the UK and EU regarding the UK's exit from the EU, we are considering the impact of Brexit on Platts' implementation of the BMR.

We are confident that S&P Global Platts will be ready to become authorized and to comply with the Regulation. While the exact impact is not entirely clear because the Level 2 rules have not been finalized, we do not expect the Regulation to have a material impact on S&P Global Platts ability to provide its price assessments, news and analytics for the global energy and commodity markets.

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IOSCO acknowledges that Platts has embraced the Oil PRA Principles

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.

Platts remains committed to ensuring its 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.

In 2013, Platts was the first PRA to align with the Oil PRA Principles and voluntarily undergo a reasonable assurance review. Additionally, in 2014 Platts was the first PRA to voluntarily extend the Principles to its price assessment processes in the power and gas, agriculture, metals and petrochemicals sectors.

IOSCO Principles for Oil Price Reporting Agencies

As part of its commitment to transparency and integrity, Platts has engaged Ernst & Young (EY) to conduct annual independent assurance reviews 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.

In its 2013 and 2014 reviews, EY confirmed that Platts' strong governance structure and operational processes were aligned with IOSCO's PRA Principles in all material respects with regard to its oil benchmarks.

EY’s 2013 and 2014 reviews were reasonable assurance reviews - the highest standard for this type of review and the standard supported by IOSCO in its Sept. 9 initial report on the implementation of the PRA Principles.

For 2014, the reasonable assurance review included a comprehensive review of Platts' documentation of its processes for price assessments used for oil and also tested the operating effectiveness of these processes in Houston, London and Singapore for the twelve-month period from 1 October 2013 to 30 September 2014.

  • Click on the button on the upper right to access the Ernst & Young report.

In 2013, Platts announced it would voluntarily apply the IOSCO PRA Principles to its non-oil commodities of power, petrochemicals, metals and agriculture and similarly, conduct annual independent assurance reviews of its alignment to the Principles.

In 2014, like in oil, Platts engaged Ernst & Young (EY) to conduct an annual independent assurance review of its non-oil alignment to the Principles. The review was completed in February 2015 and, included a comprehensive review of Platts’ documentation of its processes for price assessments used for power, petrochemicals, metals and agriculture in Houston, London and Singapore as at 28th February 2015.

As with oil, the reasonable assurance review for non-oil demonstrated Platts' alignment to the PRA Principles.

Market & Media Issues

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 Backgrounders & Educational Materials

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.

Market Transparency

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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