TRADING CONTROLS

 

Appropriate Risk Policies and Controls

What kind of risk policies do you have in place?  Are they appropriate to your risk tolerance?  Do they reflect your business needs and objectives?

What kind of procedures and controls do you have in place to ensure that your policies are being followed?

Trading Control Services

APM’s Trading Control Team can help you with development and implementation of risk policies - and ensuring adherence to those policies - through the following services:

Trading Authority Policy and Sanctions Policy Development

The Trading Control Team can assist you in drafting a Trading Authority Policy and a Sanctions Policy that cover power, capacity, natural gas, fuel oil, coal, emission allowances and renewable energy credits.

The purpose of a Trading Authority Policy is to:

  • Clearly define acceptable trading
  • Create a disciplined trading environment
  • Encourage communication among the levels in an organization

A complete Trading Authority Policy defines:

  • Who has authority to execute transactions
  • The commodities and products that can be transacted
  • The authorized lead time and term for each transaction
  • Counterparty contract and credit requirements
  • The process for approving new commodities, products or locations
  • The organization’s intention regarding hedging and speculating
  • Other relevant due diligence factors

A Sanctions Policy defines the evaluation process for violations of Risk Management Policies, and helps facilitate a risk management culture in an organization

Deal Capture Review

APM Trading Control is responsible for ensuring that all executed trades are captured completely, accurately and timely into its energy transaction & risk management systems.

When trades are executed, traders capture the details of their transactions directly into the energy transaction and risk management systems.  Trading Control is responsible for verifying the completeness and accuracy of the transactions within these systems.

Deal Capture Accuracy Report

APM Trading Control tracks deal capture accuracy by trader and provides weekly accuracy statistics to the Front Office management.

Trading Authority Policy and Hedge Policy Compliance Monitoring

Trading Control monitors transactions executed on behalf of an Owner or Client against the Trading Authority Policy to ensure compliance.  Trading Control also monitors compliance with the Owner's or Client's Hedge Policy.

Policy Exceptions Reporting

Trading Control reports any exceptions to the Trading Authority Policy or the Hedge Policy to APM’s Risk Management Committee.

Trade Confirmation

Trading Control generates and submits written confirmation letters to counterparties for all trades executed with a term of one day or longer, for purchases and sales.  Also Trading Control verifies all confirmation letters received from external counterparties.

Voice Capture

Trading Control maintains the voice recording systems at APM’s regional trading centers in Carmel, Indiana and in Cary, North Carolina.  Telephones of traders, schedulers and bilateral settlement personnel are recorded.

Trading Control is responsible for capturing and retrieving all trading conversations to support and validate executed trades.

Forward Curve Development

The Portfolio Valuation department within Trading Control is responsible for developing forward price, volatility, correlation and interest rate curves used to value forward transactions.

Mark-to-Market Valuations

Trading Control daily marks to market and reports on, all Owner and Client forward transactions to determine mark-to-market credit exposure with each counterparty.

Transaction Reporting

APM Trading Control provides transaction related reports to its Owners and Clients each day on a  secure website.  Trading Control ensures that the transaction data on the site is accurate and complete.

Data Submission to Price Index Developers

Trading Control submits transactions data to several price index developers each weekday afternoon, for next day and longer power and natural gas standard physical transactions. 

Contact a Business Development Representative.