Committee of Chief Risk Officers 8000 Research Forest Dr. info@ccro.org STE 115 #278 http://ccro.org The Woodlands, TX 77380 4 Advancing Our Energy Industry’s Risk &Compliance Best Practices Anderson: Number two is regulatory reporting. I’ve recently found that members in Europe share an interest in having the CCRO’s collaborative efforts investigate LNG transaction reporting requirements in Europe. Apparently, the EU has established a requirement to report LNG transactional details to a company called ACER. However, it's not entirely clear which transaction types and just what transaction details are required for reporting compliance. However, it's not entirely clear which transaction types and just what transaction details are required for reporting compliance. This all sounds very familiar to me. Back in 2005, there emerged an almost complete lack of confidence in the way that trading companies were reporting gas &power transaction information to price reporting agencies like Platts &NGI. This lack of market confidence led to a real crisis in market liquidity as no one was confident in the prices that they were having to settle trades at. So, our members worked together and published standards for price reporting practices. They were adopted by PRAs and even the regulator, the FERC. Today, they are almost considered common sense, with all reporting agencies following them. Similarly, here, companies are asking, “Can we get together and come up with a clear definition of what's supposed to be reported to ACER? And can we also look at why?” The current request seems to be for everything, including very long-term transactions that are not actively traded. Could this be an overreach? To those I’ve spoken with, current practice does not seem well thought-out. It just doesn't make sense to the companies involved. This is a great example of an appropriate area for CCRO to represent the industry perspective and interact constructively with all the parties involved. We could really gain traction with this if we can get members behind it. In fact – some members have suggested we include exploration of a new CCRO initiative to establish benchmarks using data contributed by member companies. Benchmarking is another area we have past experience with. We’ll be discussing more details about this in future virtual CCRO discussions. So, join us in this group to find out more! 2) Regulatory Reporting? • Clarity around current regulatory requirements (ACER) • Common understanding of requirements? • Do we perceive this as beneficial? • Interest/possibility in developing guidance proposal for submission to EU? • Alternatively creating a new CCRO developed &produced benchmark? www.ccro.org 4