BroadPeak Case Study:
Global Oil Giant Stabilizes CTRM Capabilities Using BroadPeak’s K3
Snapshot
One of Canada’s largest oil producer faced a slowdown in business operations due to degraded system performance, with batch calculations taking 6x longer than before, after completing a multi-million-dollar project to implement a CTRM system across its global enterprise.
- In just 10 weeks, BroadPeak’s K3 platform was fully integrated. The solution buffered the firm’s internal system, reducing trade counts by 80% during data ingestion, expediting processing times.
- BroadPeak’s K3 Integration platform emerged as the preferred solution for regulatory reporting, offering plug-and-play capabilities for trade data transformation and transmission.
- With BroadPeak’s solution, risk and compliance teams gained actionable insights through visual dashboards for managing position limits, meeting reporting deadlines effortlessly, and enhancing trade surveillance capabilities for compliance requirements.
“We first implemented K3 to replace our existing CTRM API connections with the ICE and CME exchanges. The implementation process was a quick few weeks and we saw an immediate and dramatic improvement in the quality of our trade data within our CTRM. K3 gave us far greater flexibility to improve the quality of our trade data before it landed into our CTRM. K3 is fairly intuitive and easy to use, hence we now have internal SMEs that manage the mapping and logic conversions, with very little need for ongoing BroadPeak support.
We also implemented K3 to automate our trade reporting for Dodd Frank purposes, then the K3 position limits module, and finally, we recently added routes to capture our order data for trade surveillance purposes. This has helped us visualize order patterns in order to meet requirements under European Market Abuse Regulation.”
Background
One of Canada’s largest oil producers successfully completed a multi-million-dollar project to implement a Commodity Trading Risk Management (CTRM) system across its global enterprise. This system was implemented to help manage the physical trades as well as the firm’s growing derivatives trading business. Users had been onboarded globally, and the business was moving forward on a single, central system.
The Challenge
Soon after the company had launched the solution, its trading volumes grew, and more data was fed into the CTRM. The firm was increasingly concerned about not realizing value from its significant investment.
- As a result of system implementation, performance degraded considerably. Batch calculations which initially took 1 hour to complete, now took 6 hours, which caused a lull in the company’s business operations.
- To solve this issue, the company initiated a remediation project, however, with data feeds tightly coupled to the CTRM, limited options were available.
- The firm explored alternatives, including additional hardware and fine-tuning its database, all to no avail.
In parallel, its compliance team faced a deadline to establish trade reporting to market regulators. While spearheading its performance improvement initiative, the firm explored external vendor solutions to pull data out of its CTRM and reformat trades to send to regulators.
The Solution
As the firm looked to the marketplace for regulatory reporting, it discovered the K3 system, and BroadPeak’s experts quickly set a plan into action to solve the firm’s problems.
- The K3 platform could solve the firm’s performance issues with a single setting. The platform can compress data records on ingest to guard downstream consumers from information overload.
- For immediate compliance needs, BroadPeak’s K3 integration platform could serve as a plug-and-play tool for pulling, transforming, and sending trade data to regulators.
- BroadPeak’s K3 solution could further benefit the company’s compliance and risk teams by automating position limits management for the derivative markets.
The firm assembled an internal project team, including members from IT, risk, compliance, and operations, along with the support of experts from BroadPeak to implement the K3 platform across its workflows. The complete integration of K3 from start to finish only took 10 weeks. This project touched on all aspects of the firm’s trade data from ingest, to analysis, to outbound reporting. On launch day, the internal team was able to take over running BroadPeak’s solution fully as they drove the implementation. This mitigated the need for a long training process for the new technology. BroadPeak’s K3 delivered immediate value for the firm’s investment.
The Result
Regarding ingest, BroadPeak’s K3 was able to buffer the firm’s internal system and compress trade counts by 80%. As a result, the firm was able to disband its performance improvement efforts and gain immediate value from its CTRM.
- Regulatory reporting deadlines were met easily, and the firm’s operations team was able to keep things running smoothly as new trade types needed to be reported or new data elements were required by regulators.
- For analytics, the firm’s risk and compliance teams were able to manage position limits with actionable visual dashboards. With a single click, they were able to dive into a position and have conversations with traders on how to manage activity as they approached applicable limits.
With an increased focus on trade surveillance, the firm’s compliance team has now licensed direct market order feeds via BroadPeak’s K3. These feeds cover all its traders’ activities in the derivative markets. The solution delivers an organized data set for this activity, which functions as the foundation for the firm’s internal surveillance program. The compliance team is now able to build custom tools to manage compliance requirements by regulators while analyzing data to answer questions bespoke to the business.