Global energy and commodity price reporting agency Argus welcomes today’s report from the International Organization of Securities Commissions (Iosco) on implementation of the principles for price reporting agencies (the Iosco PRA Principles).
Today’s report is a follow-up to the organisation’s September 2014 paper on implementation, but Iosco and the other organisations involved in the process have decided that they do not need to carry out these annual reviews in future. “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.”
Argus Media executive chairman and publisher Adrian Binks said: “I am pleased to see yet another positive review from Iosco of implementation of the PRA Principles. Argus’ extensive compliance with these principles forms part of our long-standing commitment to identifying and adopting best practice in commodity price reporting across our business. I would urge EU legislators and policy makers to note Iosco’s second implementation report today and to ensure that their negotiations on the EU’s proposed benchmark regulation lead to legislation that fully aligns with the Iosco PRA Principles with respect to PRA commodity benchmarks.”
This year’s Iosco implementation report reviews additional progress made over the past 12 months by Argus and three other leading PRAs in implementing the Iosco PRA Principles since the organisation’s 2014 report. In that report, Iosco concluded: “During the first year of implementation, the four PRAs have made good progress with regard to the PRA Principles.” The 2014 report stated that “Iosco does not believe that further alignment of the PRA Principles with those for the Financial Benchmarks Principles is justified.”
The Iosco PRA Principles were published in October 2012 and were endorsed by the G20 in November 2012. They cover governance, control, quality, integrity and conflict management in relation to commodity benchmark price assessments published by PRAs. Implementation was required in the year following their publication. Separately, in September 2013, Iosco published the Financial Benchmarks Principles, which are distinct from the PRA Principles.
A key requirement under the Iosco PRA Principles is an annual external assurance review to demonstrate compliance with the principles. Argus has successfully completed three independent assurance reviews by PricewaterhouseCoopers (PwC) in the past 24 months. Argus led the way in October 2013 with the first independent review of oil benchmarks, extending to non-oil benchmarks in February 2014. Most recently, in October 2014, Argus successfully completed its third PwC review of energy benchmarks, bringing oil and non-oil benchmarks onto the same assurance timeline and conducting the “reasonable assurance” review that Iosco now recommends. The latest assurance review report is available here.
PwC’s work is well advanced on its next annual external assurance review of Argus’ compliance with the Iosco PRA Principles. A report on this review is expected to be available in early October.