Governance and Compliance

Governance and Compliance

Compliance and ethics

We operate a rigorous and transparent control framework to govern our price reporting activities. This is underpinned by our global compliance policy, which can be downloaded below, and includes an ethics policy. Our Global Compliance Officer oversees the compliance framework, including a rolling programme of internal audits to ensure compliance with stated methodologies and policies. Our global compliance policy provides guidance on the following:

  • Context
  • Best practice
  • Corporate structure and governance
  • Ethics policy
  • Staff
  • Data and data security
  • Corrections policy
  • Methodology and compliance
  • External audit
  • Consultation and communication
  • Argus complaints handling process
  • Queries

Download global compliance PDF

Assurance review

Every year we carry out independent assurance reviews for all our commodity benchmarks. We successfully completed the latest independent assurance review of our benchmarks in October 2020.

Methodology

We use a market-appropriate methodology to assess prices in the markets we cover. We consult with many different types of participants involved in each market, and publish methodologies for each price report on our website.

Consultation and review

We continually review each methodology to ensure that it always meets the needs of market participants and is in line with industry practice. We seek to accurately and objectively reflect the way markets are traded, rather than impose a different view.

Response to consultation on changes to German fuel assessments

In April and May 2020 Argus Media published a formal consultation notification about proposed changes to the Argus German fuels services.

The consultation text is available here.

The consultation received six responses from stakeholders that agreed that their response could be published.

Argus response

In response to feedback from the market in the course of a formal methodological consultation within the framework of the IOSCO principles for Price Reporting Agencies, Argus Media issued the following announcement.

Outcome of the consultation on methodology changes related to the integration of Argus and O.M.R. services

London/Kellinghusen, 15 May 2020 (Argus O.M.R.) — Following consultation, Argus and O.M.R. will merge Argus German Fuels (Argus Handel) and O.M.R.’s Inland Price Assessments into a single report and online service publishing prices produced according to both methodologies at the start of 2021. Further integration of Argus and O.M.R. will occur as we combine the activities of our journalists into one team. That group will continue to produce low, high and volume-weighted average price assessments, offering the market a choice of pricing methodology to use in term contracts. A comprehensive list of price assessments that will be included in the Argus OMR service from the start of January 2021 is available here.

Timing

Following consultation, that overarching integration of Argus O.M.R. will occur at the start of January 2021. The alignment of regions will occur to a different timeline than initially proposed, and with a revision to the West pricing region.

The location Gustavsburg will be added to the vDIP Argus O.M.R. price for the Rhein-Main region from 1 January 2021 instead of 1 June 2020 as initially proposed.

From 1 January 2021 price region West will also include locations Neuss and Düsseldorf with a freight differential to Duisburg, like the current vDIP Argus price region Niederrhein-Ruhr.

From 1 June 2020 Argus will add vDIP prices for the East and Emsland regions.

Transactions in the low/high assessment process

O.M.R. low/high price assessments are currently based on reported offer prices and list prices received by email. From the start of January 2021, Argus O.M.R. will primarily base its low/high price assessments on reported transactions, using reported offers only when liquidity is low.

Argus has been collecting transaction data from the German downstream market for heating oil, diesel and gasoline since 2014 and now receives several hundred transactions from a growing number of market participants every day. Argus editors and reporters test the data to identify and remove outliers or other anomalous trades, after which the resulting set of data is used in the production of the Argus volume-weighted average price assessments published in Argus German Fuels.

From the start of January 2021, that cleaned trade data will also form the basis of the low/high Argus O.M.R. assessments. The high price will be the highest price at which 90m³ of heating oil and diesel and 30m³ of E5 gasoline traded in the relevant location, and the low price will be the lowest price at which 90m³ of heating oil and diesel and 30m³ of E5 gasoline traded in the relevant location. If either the high or low traded price did not trade in at least 90m³ or 30m³, Argus O.M.R. will publish a volume-weighted average of the highest-priced or lowest-priced trades whose total aggregate volume meets the 90m³ or 30m³ threshold.

If less than 500m³ of total volume is reported for a given assessment or fewer than six parties report transactions, Argus O.M.R. reporters may also take offers into account in the published low/high assessment.

Argus O.M.R. will continue to publish the midpoint price for each region as the mean of the low/high assessment.

Argus O.M.R. will cease publication of the existing Argus low and high prices, which are simply the lowest and highest reported trade for a region.

Sample data

Sample price data produced using the new methodologies described in this announcement will be made available on request. Click here to register.

Transactions and the Intraday Price Prisma

To preserve the relevance and utility of the Prisma indications, Argus O.M.R. will incorporate trade information in their creation. From the start of January 2021, the Prisma indications will incorporate trade information in a similar way to the new end-of-day low/high methodology.

Although increasingly common, not all market participants can report trades to us throughout the day. Accordingly, Argus O.M.R. editors will continue to survey market participants for both order and trade prices to inform the Prisma indications.

Assessment and Intraday Price Prisma timing

From the start of January 2021, Argus O.M.R. will advance the end times of those three survey periods, which would serve as cut-off times for information to be considered in the Prisma or end-of-day price assessments. Accordingly, information received until 11:15 will be included in the first Prisma assessment, information received until 14:15 will be included in the second Prisma assessment, and information received up to 17:00 will be included in the end-of-day assessment. Argus O.M.R. editors and reporters will continue to contact market participants by telephone and electronically throughout the day. Information about trades completed after 17:00 Central European Time and/or reported to Argus after 17:00 London time may not be considered for inclusion in the assessment.

Regional alignment

Argus and O.M.R have historically produced prices according to slightly different regional definitions. From the start of January 2021, pricing regions will fully align, and low/high and volume-weighted average price assessments will be produced for:

  • North - Hamburg
  • West - Duisburg, Gelsenkirchen, Essen base with Neuss and Düsseldorf
  • Cologne Bay - Cologne, Cologne-Godorf, Wesseling
  • Rhein-Main - Frankfurt base with Flörsheim, Raunheim, Gustavsburg, Hanau, Aschaffenburg
  • Southeast - Cunnersdorf, Gera, Hartmannsdorf, Leuna, Rhäsa, Thüringen (Lederhose)
  • Southwest - Karlsruhe
  • South - Ingolstadt, Vohburg, Neustadt
  • Magdeburg - Magdeburg
  • Seefeld-Schwedt - Seefeld, PCK Schwedt
  • East - Berlin including Kablow
  • Emsland - Lingen, Osnabrück, Münster

From the start of June 2020, Argus O.M.R. will cease the Argus assessments for Munich.

Volume-weighted averages become vDIP

To more clearly differentiate the various types of assessments published by Argus O.M.R., the current set of Argus volume-weighted average price assessments will be renamed “vDIP Argus O.M.R.”. The methodology governing those prices will not change.

Standardising 98 Ron and E10 assessments

Both Argus and O.M.R. publish price assessments in the less liquid 98 Ron and E10 markets based on differentials to the more active trade in E5 gasoline. From the start of January 2021, both low/high and vDIP assessments will use a single assessment of a national consensus differential to E5, as currently reported in Argus German Fuels for 98 Ron and E10 gasoline, which will then be applied to regional E5 low/high and vDIP assessments to produce outright regional 98 Ron and E10 gasoline prices.

Conclusion

Thank you very much for your response to this consultation. We look forward to working with you on bringing more transparency to the German downstream market.

Best regards,

Kevin Schaefer, Hagen Reiners | Geschäftsführer Editor - German Fuels

Kevin Schaefer, Hagen Reiners 
Geschäftsführer Editor - German Fuels

Response to consultation on changes to LPG assessments

In October and November 2018, Argus Media published an LPG formal consultation notification.

London, 19 October (Argus) — In response to requests from market participants, Argus proposes to narrow the spread used in the event that only assessment-relevant bids or offers are available in the market at the time of assessment — as described on page 7 of the Argus International LPG methodology — to $6/t from $10/t.

Argus also proposes to move from rounding bids and offers to the nearest dollar, to the nearest 50¢.

The consultation received one response from a stakeholder that agreed that their response could be published.

Argus response

In response to feedback from the market in the course of a formal methodological consultation within the framework of the IOSCO principles for Price Reporting Agencies, Argus Media issued the following announcement.

Argus to narrow northwest European and Mediterranean propane and butane spreads to $6/t from $10/t

Following consultation, Argus will narrow the price spread published in the event that only assessment-relevant bids or offers are available in the market at the time of the assessment to $6/t from $10/t. The change will take effect on Wednesday 2 January 2019.

Following consultation Argus will also begin rounding bids and offers to the nearest 50¢ instead of the nearest dollar in early 2019. A precise date for this change cannot be announced at this time for technical reasons, but will be announced shortly.

Responses to consultation on changes to coal assessments

In December 2017, Argus Media published a thermal coal formal consultation notification. The consultation proposed that the specifications for the Argus cif ARA and fob Richards Bay 6000 price assessments should be widened to incorporate a minimum calorific value of 5,700kcal/kg.

The consultation also recommended that the minimum cargo size for the Argus cif ARA (5,850kcal/kg) price assessment be reduced to 25,000t, with effect from 26 February 2018.

The consultation ran for five weeks and many different issues were raised in the process, including:

  • What happens to the current index – for longer term deals?
  • Shouldn’t the specification match the globalCOAL DES ARA 5700 contract?
  • Why change volume size to 25,000t for DES ARA?
  • Why not publish parallel indexes? Several market participants asked for additional data on the size of the 5700 market and the number of trades.
  • Why raise the max ash to 18pc on Fob Richards Bay 5700 contract?

The consultation received 26 responses, but only four stakeholders agreed that their responses could be published.

Argus response:

In response to feedback from the market in the course of a formal methodological consultation within the framework of the IOSCO principles for Price Reporting Agencies, Argus Media is launching two new physical thermal coal assessments, covering the lower calorific value 5,700 kcal/kg activity for CIF ARA and FOB Richards Bay.

The launch of these assessments will not compromise the integrity of the current API2 and API 4 indexes. In due course, Argus will initiate a review process, in conjunction with stakeholders, to determine if the cif ara and fob rb 5,700 kcal/kg pricing is sufficiently robust and transparent to form the basis of new benchmark indexes.

For further information, please contact Dan Hayes.

Editorial code of conduct

All our reporters and editors operate according to a rigorous editorial code of conduct which aligns with best journalistic practice, including the avoidance of conflicts of interest. Our code of conduct provides guidance on the following:

  • Accuracy
  • Confidential sources
  • Impartiality
  • Conflicts of interest
  • Professionalism
  • Plagiarism
  • Attribution and sourcing
  • Questions about this code

Download code of conduct PDF

Regulatory responses

Argus maintains an active public policy programme to keep abreast of relevant international developments. We regularly engage with policy makers, regulators, governments and other industry bodies to promote transparent and efficient wholesale commodity markets.

Comments and complaints

Argus has a formal complaints handling procedure, which can be found on page 6 of the Global Compliance Policy. For further information on this policy and any compliance issues, please contact us.

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Modern slavery statement

Argus takes its legal responsibilities under the Modern Slavery Act 2015 seriously. Read our statement about the steps we have taken to prevent modern slavery and human trafficking in our business and among our suppliers.

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