Energy trading markets have been
undergoing radical transformation lately. These transformations are set to
accelerate in 2013 because of much anticipated implementation of new rules that
will govern global swaps markets.
These include measures
such as position
limits, mandatory clearing
and margin requirements,
capital requirements, pre-
and post- trade transparency
through position reporting
requirements to trade
repositories, as well
as trading standardised swaps
on designated contract
organisations or swap execution facilities where multiple traders can
place bids and offers, and real time
reporting of cleared
and uncleared swaps
to the centralised
swap data repositories.
These changing dynamics
present new challenges
not only for
financial speculators, who
buy or sell
any asset in
the anticipation of a price
change, but also for traditional energy companies that use previously
unregulated financial derivative
instruments to hedge or mitigate commercial risk.
