Commodity XL Enterprise Risk Management Solution Suite

Transcription

1 TIPLE POINT ISK MANAGEMENT BOCHUE Commodity XL Enterprise isk Management Solution Suite MAKET ISK / OPEATIONAL ISK / CEDIT ISK / EGULATOY ISK TIPLE POINT TECHNOLOGY, INC. TPT.COM

2 Commodity XL isk Management Overview THE BUSINESS EQUIEMENT FO MANAGING ENTEPISE ISK Business conditions in the energy and commodities trading area will continue to be defined by sharp price volatility, increasingly risky counterparty credit and greater regulatory oversight. Industry surveys show that many companies are still attempting to manage operations and risk with disparate systems and spreadsheets. This creates information silos across the business and greater opportunity for human error. Additionally, disparate systems decrease the ability to extract meaningful data for proactive decision-making and minimize the ability to introduce automated controls and work flow. In today s challenging environment, complete transparency and control across the enterprise requires that all areas of exposure market risk, operational risk, counterparty credit risk and regulatory risk be tightly integrated. COMMODITY XL ISK MANAGEMENT BUSINESS ASSUANCE ANALYTICS ISK COUNTEPATY CEDIT OPEATIONAL ENTEPISE ISK MANAGEMENT T ANSACTION SYSTEMS ENTEPISE ISK S T AIG H T-T H O U G H P O C E S SIN G MAKET / PICE COPOATE GOVENANCE & EGUL ATOY COMPLIANCE POACTIVE DECISION SUPPOT Manage enterprise risk on an integrated platform Triple Point s Enterprise isk Management Market isk Manage price risk with analytical tools Analyze real-time position Utilize complete curve management Operational isk Integrate logistics with trading Set alerts and limits Eliminate rekeying and errors Counterparty Credit isk Gain real-time visibility of credit exposure Capture 360 view of counterparty relationships Manage collateral and automate margining egulatory isk Meet all FAS 133, IAS 39 and FAS 161 regulatory compliance requirements Forecast earnings at risk Define and measure fair value TIPLE POINT S ENTEPISE ISK MANAGEMENT SOLUTION Triple Point s award-winning Commodity XL is the only solution that provides best-of-breed functionality on a real-time, integrated platform across the four key areas of risk: market, operational, counterparty credit and regulatory. Commodity XL enables transparency into risk measures and analytics and allows organizations to holistically manage and mitigate risk a requirement to succeed in complex commodity and energy markets. Triple Point s advanced risk solution manages all key areas of exposure indicated by the Committee of Chief isk Officers (CCO) on a common platform: Market isk Operational isk Counterparty Credit isk egulatory isk TIPLE POINT TECHNOLOGY, INC. 2

3 isk Management is the #1 business critical issue that commodity and energy trading firms face. Changes in Commodity Markets Impacts on Traders and Software, CommodityPoint MAKET ISK The last few years have seen a dramatic increase in price volatility, almost universally across all commodities including energy, agriculture, freight and metals. Due to a tight supply/demand situation, increasing geopolitical risk and more interconnected commodity price movements (e.g. biofuels), analysts forecast commodity price volatility to remain at high levels for the foreseeable future. How Commodity XL Manages Market isk Commodity XL s risk engine is uniquely capable of capturing all aspects of energy and commodity market risk including price, supply, load, credit and delivery and quantifying the volumetric risk in all levels of granularity from annual through sub-hourly to custom. Commodity XL supports a comprehensive set of risk metrics and price risk management tools that are critical for effective trading, sourcing and hedging of commodities in volatile markets: Value-at-isk (Va) Greeks What-If Scenarios Portfolio Stress Testing Sensitivity Analysis Mark-to-Market (MTM) P/L Attribution isk managers can model complex structured deals, demand and supply contracts and disparate multicommodity financial and physical portfolios. Commodity XL helps companies gain business intelligence for superior decision-making and proper oversight and provides the ability to measure, monitor and control risks inherent and unique to the energy and commodity markets. BUSINESS ASSUANCE ANALYTICS ISK COUNTEPATY CEDIT OPEATIONAL T ANSACTION SYSTEMS ENTEPISE ISK MAKET / PICE MAK-TO-MAKET S T AIG H T-T H O U G H P O C E S SIN G POACTIVE DECISION SUPPOT Gain consistent position and valuation across the enterprise COPOATE GOVENANCE & EGUL ATOY COMPLIANCE COMMODITY XL MULTIPLE COMMODITY EXPOSUE WHAT-IF SCENAIOS Va / STESS TEST P/L Attribution Analyze P/L performance based on factors including new, modified and deleted deals, curve change and realization roll off, and view what item influenced change. Simulation Manager Understand the impact that changes to price, volatility, time and interest rate curves have on Position, Greeks and MTM P/L. What-if Trades Enter trades and see results before deciding whether to abort or execute. Va Manager Calculate and analyze Value at isk with simulations including Analytical, Monte Carlo, Historical and Extreme Value Theory. Provide advanced business intelligence for proactive decision-making TIPLE POINT TECHNOLOGY, INC. 3

4 If an organization s bottom line is subject to extensive variability because of fluctuating commodity prices, it becomes paramount that it implements systems to manage commodity risk centrally on a holistic basis. Foundations of GC: Commodity isk Management OPEATIONAL ISK Operational risk stems from the misrepresentation and mishandling of information, resulting in a lack of actionable data and poor decision support. Overreliance on spreadsheets, human error in rekeying data, unauthorized trades, limit-breaking and improper controls are just some of the operational risks that energy and commodity participants face. Successful enterprises manage operational risk by deploying a system of business processes and checks and balances to support increased control and efficiency. How Commodity XL Mitigates Operational isk Commodity XL provides companies with the infrastructure and tools to effectively manage operational risk including front office controls, integrated logistics and straight-through processing. Front Office Controls Commodity XL sets trade and counterparty limits and uses them to report appropriate exposure and send real-time alerts when limits are approached or broken. SETTLEMENT TAFFIC INVOICING SCHEDULING TADING Get one version of the truth across business units with STP POSITION PICING CONTACTS COMMODIT Y XL BUSINESS ASSUANCE ANALYTICS ISK COUNTEPATY CEDIT EXCHANGE INTEGATION FONT-OFFICE CONTOLS INTEGATED LOGISTICS/SCHEDULING OPEATIONAL INTEGATED INVOICING & SETTLEMENT T ANSACTION SYSTEMS ENTEPISE ISK S T AIG H T-T H O U G H P O C E S SIN G MAKET / PICE POACTIVE DECISION SUPPOT COPOATE GOVENANCE & EGUL ATOY COMPLIANCE Manage operational risk with front office controls, integrated logistics and straight-through processing Integrated Logistics Commodity XL integrates scheduling and logistics with trading and accounting on a real-time basis for improved transparency, enabling the effective and efficient movement of commodities. Scheduling and logistics support movement via transmission line, vessel, truck, train, barge or pipeline. Throughout the scheduling and logistics process, inventory and storage positions are managed, both in-transit and in-store. Straight-through Processing Additionally, Commodity XL eliminates the human error associated with rekeying data. Delays in data reaching each person in the transaction chair are eliminated, resulting in faster and better decisionmaking. Straight-through processing (STP) eliminates duplicate efforts and errors, while lowering costs per transaction. Data is entered once at the source and flows through the entire organization. Updates are immediately reflected through the whole system. Improve internal controls and efficiency across the enterprise TIPLE POINT TECHNOLOGY, INC. 4

5 A shocking 70% of companies are still using spreadsheets to manage credit risk, even though spreadsheets are error-prone, lack scalability and can t support sophisticated and timely decision-making. UtiliPoint Credit isk Management Survey Conducted on Behalf of Triple Point CEDIT ISK It has always been of utmost importance to manage counterparty credit risk effectively. In today s challenging business environment, where one misstep can lead to the instantaneous denial of credit and associated death spiral, it is even more critical. How Commodity XL Manages Credit isk Triple Point s Credit isk solution is a complete endto-end solution integrating counterparty management, collateral optimization, contract management, concentrations and credit analytics within a single, transparent framework. Commodity XL helps companies improve efficiency in their credit processes and optimize credit and liquidity decisions. Counterparty Management Provides a single counterparty system of record to manage counterparty relationships, credit limits, and credit scoring across the enterprise. Tracks joint ventures, parent-child relationships, multiple business units and diverse geographical divisions, enabling accurate credit analysis and decisions. Collateral Optimization Gain real-time, transparent view of collateral obligations, enabling timely margin calls, reduction of delays in collateral receipts and elimination of lengthy disputes. Optimizes liquidity by forecasting expected or potential margin calls and applying the most contractually favorable collateral strategy across cash, letters of credit and guarantees. Contract Management Centralized contract management system digitizes key terms, providing an ongoing, consolidated view of contractual requirements. Quick and easy access to all legal agreements ensures compliance and improves contract negotiations. SCOING & ANALYTICS BUSINESS ASSUANCE ANALYTICS ISK COMMODITY XL FO CEDIT ISK CONTACT MANAGEMENT COUNTEPATY CEDIT COLLATEAL AND LIQUIDITY MANAGEMENT COUNTEPATY MANAGEMENT OPEATIONAL T ANSACTION SYSTEMS ENTEPISE ISK S T AIG H T-T H O U G H P O C E S SIN G MAKET / PICE POACTIVE DECISION SUPPOT COPOATE GOVENANCE & Manage credit risk within a single, transparent framework EGUL ATOY COMPLIANCE Concentrations Delivers consolidated real-time view of exposure across all business units resulting in quick access to identify, monitor, mitigate and report future credit events. Calculates cash, forward, current and potential exposure on a portfolio-wide basis and produces concentration analysis by commodity, industry sector, credit rating, country and any number of other metrics, enabling firms to align risk profile with risk appetite. Credit Analytics Provides a consistent framework to forecast, evaluate and respond to market uncertainties. uns stress scenarios and what-if simulations to calculate Potential Future Exposure and Credit Value at isk. Combines market price movement and rating migration, enabling firms to create a hedge or diversifying strategy. Advanced data-driven insights provide a clear picture of future opportunities and threats. Gain real-time visibility into credit exposure and liquidity obligations TIPLE POINT TECHNOLOGY, INC. 5

6 egulatory risk is seen as the most significant threat to business and a greater source of concern than country risk, market and credit risk, terrorism and natural disasters... Nine out of ten executives expect the business costs of regulation to rise over the next three years. excerpt from report in Energy isk Magazine, citing a global survey by Economist Intelligence Unit EGULATOY ISK Volatile markets, difficult credit conditions and uncertain business environment are driving increased regulatory and government oversight and regulation. How Commodity XL Mitigates egulatory isk Triple Point s Treasury Management and egulatory Compliance solution suite supports strict compliance with both hedge accounting and fair value disclosure standards under FAS 133, IAS 39, CICA 3865, AASB 139, SAS 133, FAS 161, FAS 157 and IFS 7. Additionally, the suite provides advanced modules for foreign exchange, interest rate and multiple commodities on a common platform. Hedge Accounting Commodity XL enables firms to balance optimal economic benefit, risk management and stable financial statements and manage all requirements under hedge accounting regulations including FAS 133 and IAS 39. FAS 161 Commodity XL is a complete solution to identify and report enhanced fair value disclosures for derivative instruments and hedging activity, allowing you to greatly reduce the time and cost required to achieve compliance with both FAS 133 and FAS 161. It provides a summary of derivative instruments in terms of underlying risk by accounting classification and is presented in a tabular format. BUSINESS ASSUANCE ANALYTICS ISK COUNTEPATY CEDIT OPEATIONAL T ANSACTION SYSTEMS ENTEPISE ISK S T AIG H T-T H O U G H P O C E S SIN G MAKET / PICE FAS 133, IAS 39 POACTIVE DECISION SUPPOT COPOATE GOVENANCE & EGUL ATOY COMPLIANCE Ensures full compliance with hedge accounting regulations HEDGE DOCUMENTATION EFFECTIVENESS TESTING AUTOMATED & AUDITABLE DISCLOSUES COMMODIT Y XL FO HEDGE ACCOUNTING Fair Value Disclosure Commodity XL defines, measures and manages fair value levels and meets all disclosure requirements to comply with FAS 157 and IFS 7. The solution provides the consistency and comparability of fair value measurements for stakeholders to confidently do business with your organization. Balance optimal economic benefit, risk management and stable financial statements TIPLE POINT TECHNOLOGY, INC. 6

7 ABOUT TIPLE POINT TECHNOLOGY, INC. Triple Point is the leading global provider of innovative software solutions to efficiently and profitably manage commodities and enterprise risk. Triple Point s growing, loyal customer base of over 260 companies represent all industries with exposure to energy and raw materials including oil and gas, coal, metals, agriculture, transportation, shipping, consumer products (CP), discrete manufacturers, and big box retailers. The company was named a Leader in Gartner s ETM Magic Quadrant for its completeness of vision and ability to execute. Triple Point offers the only real-time solution to manage market/price, counterparty credit, operational, and regulatory risk on a tightly integrated platform. Founded in 1993 and headquartered in Westport, CT, USA, Triple Point employs over 600 people in 11 offices and support centers around the globe. How to Get Started To learn how Triple Point s Commodity XL software solutions can benefit your supply, marketing, procurement, hedging or trading activities, please contact us at one of our offices below. More information is available at Corporate Headquarters 301 iverside Avenue Westport, CT USA Tel: Europe, Middle East and Africa Headquarters 24 Chiswell Street 6th Floor London EC1Y 4TY England Tel: +44 (0) Asia-Pacific Headquarters C 901 Pune IT Park Bhau Patil oad Pune, India Tel: Parsippany 222 New oad Parsippany, NJ USA Tel: Houston Brazil Singapore Chennai Westheimer oad Suite 705 Houston, TX USA Tel: Nações Unidas Avenue, 14171, Floor 15 São Paulo, SP Brazil Tel: B Orchard oad #23-01 Ngee Ann City Tower B Singapore Tel: ESPEE IT PAK 7th Floor No.5 North Phase Jawaharlal Nehru oad Ekkattuthangal, Chennai Tel: Geneva Cape Town Vienna Avenue de la Gare 25B CH-1180 olle Switzerland Tel: +41 (0) Dorp Street 7600 Stellenbosch South Africa Tel: Babenbergerstrasse 9/ Vienna/Austria Tel: TIPLE POINT TECHNOLOGY, INC. 7