Typical commodity & energy trade operations are quite diverse. It includes the following:
- Deal confirmation process
- Confirmations control
- Transactions must be confirmed by the trader to his colleagues in the back office, as well as by the counterparty; once these match, the deal is firm.
- Confirmations control
- Matching of orders
- Billing, invoicing & messaging
- Cash transferring
- Transfers because of amounts receivable or payable.
- Due to payments of invoices and settlement processes.
- Transfers because of cash collateral deposits and withdrawals.
- Margining due to clearing.
- Transfers because of amounts receivable or payable.
- Settlement
- Payments
- Delivery
- Contracts must be unwinded. This typically involves delivery versus payment. Settlement of agreements could involve obligations or the execution of rights.
- Events processing
- All kinds of events can take place which lead to the desire or need to adjust positions and the related valuation.
- Nomination
- Utilisation of transport capacity must be nominated to the operator, including the use of gas pipelines, power grids, oil tankers and vessels to ship coal, metals or soft commodities.
- Allocation & reconciliation.
- Accounting
- Financial reporting;
- Regulatory reporting;
- Monitoring of hedge documentation;
- Review of ongoing hedge effectiveness.