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The International Organization of Securities Commissions today issued the report Implementation of the Principles for Oil Price Reporting Agencies (The ‘IOSCO Oil PRA Principles’), prepared in collaboration with the International Energy Association (IEA), International Energy Forum (IEF) and Organization of Petroleum Exporting Countries (OPEC). The report reviews the implementation of the IOSCO Oil PRA Principles during the 18 months after their publication in October 2012.
Overall, IOSCO’s report concludes that the implementation of the IOSCO Oil PRA Principles remains an ongoing process but good progress was made during the first year of implementation. IOSCO’s review suggests that stakeholders are broadly content with how the PRAs have implemented the Principles. Stakeholder feedback and further analysis by IOSCO also suggests that certain aspects of the implementation warrant further examination. This includes further work on operational inefficiencies that may still exist and monitoring for the risks relating to the quality and quantity of information to which the PRAs have access to for their prices assessments. Therefore, IOSCO intends to undertake further work in this regard into 2015 after the Principles have had the opportunity to be further embedded into PRA processes and more external assurances have been undertaken.
The report describes the steps IOSCO undertook to complete the review. IOSCO, in collaboration with the IEA, IEF and OPEC, liaised with the four main PRAs identified as the most relevant for the purposes of the review, and engaged with stakeholders to obtain their views on the implementation efforts of the PRAs. Finally, the review also involved collaboration with audit practitioners to better understand the conclusion of the external assurances undertaken by each of the PRAs and to assist in their preparation of external assurance guidance.
The IOSCO Oil PRA Principles were prepared in response to a request from the G20 Leaders at their Cannes Summit in November 2011 in relation to PRAs, that “IOSCO, in collaboration with the International Energy Association (IEA), International Energy Forum (IEF) and the Organization of Petroleum Exporting Countries (OPEC), prepare recommendations to improve their functioning and oversight….”
The IOSCO Oil PRA Principles specify implementation within one year of publication, i.e., by October 2013. The report published today satisfies IOSCO’s commitment to review implementation eighteen months after publication.
Going forward, IOSCO is working with IEA, IEF and OPEC to assess the impact of the IOSCO Oil PRA Principles on physical markets. It intends to provide an assessment of any potential impact in a report to the G20 leaders at the Summit in Brisbane in November 2014. At the summit, IOSCO will also submit a report summarizing the further work it intends to undertake to examine the key issues surrounding implementation.
