Surveillance technology essential as energy market comes under regulatory scrutiny b-next experiences rising demand for its

CMC platform from energy trading firms as they look to ensure compliance with new regulations LONDON, 31 January 2013 b-next, the specialist provider of market abuse surveillance, insider dealing and compliance software solutions, is seeing a significant increase in demand from energy market participants for its surveillance and compliance systems. Several new regulations aimed at the prevention of market abuse and insider trading are currently entering into force, which will apply levels of regulatory oversight not seen before in the energy markets. b-nexts scalable CMC platform is attracting considerable interest as it provides energy firms with practical ways to ensure that their activities are compliant with the new regulations. During 2013-14, the reporting requirements associated with REMIT and EMIR will require firms to provide trade data to regulators, as regulators commence their own surveillance of markets. Whilst energy trading firms already have complex energy trading and risk management software in place these systems do not include sophisticated surveillance capabilities. Firms should consider implementing tools which can provide this in order to pre-empt enquiries from the regulator. With its long history and proven track record in working with leading banks, financial institutions and regulators, b-next sees potential to help energy trading firms to implement compliance oversight and risk management. b-nexts scalable CMC platform enables detection of Market Abuse, Insider Trading, Conflict of Interest, Derivatives/OTC Monitoring, and Best Execution reporting on both Exchange and OTC markets. It is reported the FSA handed out 312 million in fines in 2012, states Martin Porter, Business Development Director, b-next. Firms operating within the energy markets are fast becoming aware of the potential consequences of breaching compliance rules. While regulation and directives such as REMIT and MAD highlight the importance of surveillance, it is currently up to companies to determine their own approach to comply with them. In the near future however, energy firms will need efficient trade surveillance systems in place to monitor against abuse and suspicious activity. A growing number are looking to implement a surveillance and compliance system such as ours, which can monitor both exchange and OTC trading, to avoid the financial and reputational damage that could result from an allegation. Due to increased regulatory pressure, energy trading firms are now focusing on transaction surveillance as a new area for investment and development. Despite the degree of uncertainty at present, if energy companies are prepared to make some intelligent assumptions about what will be mandated, it is possible to determine a high level roadmap for ensuring compliance, reduce implementation risks over the longer term, and also identify additional opportunities. Simon Bates, Senior Partner of Bryok comments; ACER has been set a very challenging responsibility within REMIT. If they get it right and are able to deliver, they will have created a central, cross-border, cross-venue, cross-asset-class, market monitoring facility. Something thats not likely to be achieved in the European Equity markets, any time soon. Currently, there are only rudimentary and inconsistent levels of monitoring of the European Energy markets. ACER, having defined all the necessary standards have started a technology project to implement a somewhat bespoke solution. I would urge all market participants to implement their own efficient market

monitoring system. This will ensure that data passed to the regulator contains no abusive order or trade patterns. Implementing a surveillance capability can be a challenging prospect for energy companies, says Sarah Benson, Senior Manager, Baringa Partners. Surveillance processes and technology are generally unfamiliar to them and energy products are inherently complex. But by taking a phased approach and by starting with simpler exchange traded products first, firms can gradually build their knowledge whilst meeting regulatory requirements. They should also look for opportunities to get additional value from their investment. These systems contain rich data that can be a great source of market intelligence for them.

Notes to editors About b-next b-next is a specialist provider of proven multi-venue, multi-asset class, Capital Markets Surveillance and Compliance software solutions to meet regulatory mandates, manage risk and drive trading efficiencies. The b-next Capital Markets Compliance (CMC) solution is a single integrated compliance platform for detection of Market Abuse, Insider Trading, Conflict of Interest, Derivatives/OTC Monitoring, Best Execution reporting and more. With over 150 customers, b-next has a 20 year history of delivering solutions to market participants, exchanges and regulators. For more information please visit. www.b-next.com About Baringa Partners Baringa Partners LLP is a management consultancy that specialises in the energy, financial services and utilities markets in the UK and continental Europe. Baringa works with organisations either to implement new or optimise existing business capabilities relating to their people, processes and technology. Its Energy and Utilities practice specialises in Advisory Services, Assets and Asset Optimisation; Energy Trading and Risk Management; Retail and Customers; Market Design; and Networks, Distribution and Metering. In 2012, Baringa was named as the Best Place to Work in the UK for the third consecutive year, and 5th in Europe, by the Great Place to Work Institute, as well as winning The National Business Awards Employer of the Year category, reaffirming its status as a leading people-centred organisation. Baringa Partners is also Energy Risks Consultancy Firm of the Year for 2012 and won the Commodity Business Award for Market Policy and Advisory. www.baringa.com About Bryok Bryok are independent market information experts and practitioners in financial, energy and derivative markets. Operating internationally, we help our clients achieve success in a complex environment by assigning expert staff and thought-leaders and by deploying our intellectual property. www.bryok.com