PRE-TRADE RISK MANAGEMENT
More stringent financial and regulatory risk management controls are designed to reduce the risks associated with market access and thereby enhance market integrity and investor protection. However, the increasing costs of capital are one of the (perhaps) unintended or prohibitive consequences of developing a more secure trading architecture. But whatever your view of the imposed and pending regulatory environment, the simple fact is that capital for trading purposes is in short supply and increasingly expensive.
EMAG’s evolution is the culmination of close consultation with the industry and regulators
There has been a major evolution of trading
systems over the last twenty years. In European energy, Trayport has established itself as the pre- eminent environment for the trading of energy products over its award winning platform Trading GatewaySM
trading market already use Trayport trading screens. At the same time, no other vendor (or GCM) has attempted to build a complete pre-trade product because of the complexity of the energy markets, as well as the cost involved. Trayport has developed the EMAG control
software to allow energy trading companies to comply with this new market paradigm, allowing firms to maximise trading, with the ability to put on risk ... leading to greater volumes and liquidity. It is in just such a market that real competition – and ultimately rewards to consumers – will be realised. Pre-trade risk management, therefore, represents a critical part of European energy market development in the face of this stricter and necessary rules-based environment. Trayport’s goal – and arguably that of the wider
. For two decades the European energy
trading community has been connected by Trayport technology which underpins over 80% of all power, gas, coal, emissions and freight futures and forwards trading in Europe. That’s a good enough reason on its own as to why Trayport, as a software house, was best placed to build a pre-trade solution, as the majority of the energy
42 December 2012
industry – is to ensure that the needs of the regulator and market are met by developing mechanisms to stimulate trading, transparency and liquidity. In this way, trade reporting is moving to real time. The pre-trade element of the trading lifecycle has therefore become all the more critical as European energy trading firms seek to adapt to these new conditions for the benefit of the market. •
Guy Isherwood is Publisher & Editor of Commodities Now.
www.commodities-now.com
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