This document describes the procedures and methods that DCA Market Intelligence B.V. applies for its Benchmark Prices.
The benchmark prices from DCA Market Intelligence have been developed to provide clear and reliable insight into the price formation in a specific market of a particular commodity. The commodity and the parameters of the market for each benchmark price, such as type, delivery, quality, currency, etc., are specified in consultation with the sector. DCA Market Intelligence determines the specifications and follows the industry standard as much as possible. DCA Market Intelligence, as benchmark price manager, determines for each benchmark price and the underlying commodity the method that leads to a benchmark price that best represents the developments in that market. The principles that DCA Market Intelligence uses, as a benchmark price manager, are described in this general section. The specifications of products, the benchmark prices, and the determination are described in separate attachments.
This document is kept up to date on the DCA Market Intelligence website.
The input data used for the determination of benchmark prices are:
a. Closed and reported transactions
b. Bids and offers
c. Other information
Other information includes, but is not limited to;
a. Indicative prices
b. The opinion of market participants
c. Heards
Developments in similar (future) markets
d. Information obtained in discussions with market participants
e. The assessment of the price reporters of DCA Market Intelligence
DCA Market Intelligence can convert prices from similar markets for similar commodities to the underlying commodities and the market of the benchmark price concerned according to the industry standards (Normalization).
DCA Market Intelligence can disregard prices or allocate prices a different weight or value if it believes that the data deviates too much from the markets or the described methodology or in the case that a particular transaction or market party is weighted too heavily in the final value of the benchmark price. A minimum number of observations may apply. If, in this case, this minimum is not met, then this is announced in the same way as the benchmark price is announced.
Given the unpredictability of the commodities markets, there is by default no threshold for the volume belonging to the input prices of contributors. For the benchmark price calculation, there is by default no threshold for the number of input parameters.
Data can be reported via the DCA Market Intelligence Price Reporting System, telephone, or electronic messages. It is possible to report data during a period determined by DCA Market Intelligence. Data received outside this set period is not included in the determination of the benchmark price.
Changes to the standard method of determining each benchmark price will be made in consultation with the market of the relevant commodity and the derived contracts. The actual implementation of the changes is announced in advance with a timetable that will provide stakeholders with ample time to anticipate and react to the changes. Official responses from the market to the changes, unless confidentially submitted, will be published as well as the reaction of DCA Market Intelligence to these responses.
DCA Market Intelligence regularly examines its methods to ensure that they are a reliable reflection of the assessed market. For this reason, there will be a consultation round with contributors and relevant users at least once a year.
DCA Market Intelligence endeavors to incorporate as much traceable input, provided in good faith, as possible when determining a benchmark price methodology.
If there are insufficient transactions in a market to determine an adequate benchmark price value or if it becomes apparent that the transaction data does not result in a representative benchmark price value, DCA Market Intelligence will estimate the correct value. The estimation is made by using a wide range of information.
If it turns out that, despite this, it is not possible to determine an adequate benchmark price value, DCA Market Intelligence publishes the previous value of the benchmark price. Or it decides not to calculate a benchmark price for that week. In both cases, DCA Market Intelligence publishes this with an explanation. Deviating input data are analyzed on frequency and origin. If a pattern seems to occur, this is investigated which can lead to a standard correction of this or exclusion of this input. These actions are registered each time they occur.
DCA Market Intelligence strives to follow the developments of the market as well as possible and to represent them in its benchmark prices. For the calculation of the benchmark prices, DCA Market Intelligence stimulates contributors to provide all information and input data that fall within the benchmark price methodology and criteria.
All contributors and Insiders must adhere to the quality and integrity criteria associated with the benchmark price methodology of DCA Market Intelligence.
When publishing the benchmark price value, DCA Market Intelligence gives a brief explanation of how the benchmark price was compiled for that period. Where possible, an indication is provided of the number of observations that have been used and the range of the price input. If the price is not determined according to the standard method, it will be explained how the price has been determined.
If the standard day of publication of the benchmark price falls on a public holiday in the Netherlands, then the price will be determined and published the next day. In the case that the next day is not a working day, the price will be determined and published on the day before the standard day of publication. DCA Market Intelligence can publish a public holiday schedule in advance in which the deviating publication dates are published.
DCA Market Intelligence reserves the right to withhold the publication of a benchmark price value or to release it at a later time in the event of unforeseen calamities. This includes but is not limited to, a power outage, network problems, communication problems, terrorist attacks, or other events that disrupt the processes of DCA Market Intelligence but also distortions of the market underlying the benchmark price.
DCA Market Intelligence will do everything possible to inform the market about the consequences of the publication schedule and will make every effort to publish the benchmark price if it meets all the requirements that DCA Market Intelligence sets for the benchmark price. Corrections may be made by DCA Market Intelligence after the publication and will be announced as soon as possible.
Corrections will solely be made based on data that was known when the benchmark price value was determined.
DCA Market Intelligence draws up a list of contributors and their substitutes. For some benchmark prices, a group of insiders will be appointed who play a role in determining the benchmark price. Contributors are selected based on their relevance in the market in terms of transaction volume and their will and ability to substantiate their transactions and other input and to share this as determined by DCA Market Intelligence.
The appointment of the contributors and their substitutes is approved by the management of the company by which they are employed. For each contributor, it is recorded which input data has been delivered, how often, and with which substantiation. The insiders are selected based on their relevance in the market and their knowledge of it. They provide input in a personal capacity.
Measures are taken against a contributor and/or an Insider who in any way tries to influence a calculation in favor of a trading position or who tries to persuade an accessor to violate the benchmark price methodology or criteria of DCA Market Intelligence. Or who identifies other contributors to involve them in a pattern of submission of deviating or suspicious transaction data. These measures include but are not limited to, reporting to the relevant authorities, exclusion as contributor/Insider, reporting to the management of DCA Market Intelligence, and reporting to the management of the company of the contributor.
DCA Market Intelligence uses solely trained price reporters for the determination and assessment of input data. The price reporters are familiar with and can correctly implement the standard procedures that ensure consistent application of the rules and procedures.
The minimum level of education is MBO4. All price reporters affirm the quality and integrity standards of DCA Market Intelligence, as described in this document. Upon appointment and in January of each year, the latest version of this document is signed and stored in the personnel file.
DCA Market Intelligence provides an adequate replacement for every price reporter in case the price reporter is unable, for any reason, to fulfill the benchmark price procedures. Each benchmark price value published has been checked and approved by at least one other price reporter, which is also recorded. If an price reporter has reason to believe that procedures for determining the benchmark prices have been neglected or that the benchmark price is not a correct representation of the situation in the market or that there are other misconducts, then the price reporter reports this immediately and directly to the management of DCA Market Intelligence. The management of DCA Market Intelligence will periodically review the outcomes and the correct application of the benchmark price procedures.
All data related to the determination of the benchmark price value is stored for a minimum of five years. This includes:
a. All input data
b. The assessments that have been made by price reporters when
they determine the benchmark price calculation
c. Whether a calculation has excluded a particular
transaction, which otherwise met the requirements of the
relevant methodology, and the underlying reasons for this.
d. The identity of each assessor and of any other person who has submitted or generated otherwise the information under a, b, or c.
DCA Market Intelligence is an independent and impartial price reporter and does not have any interest in steering the outcome of its benchmark price calculation. The goal of the benchmark price calculation is to provide the best possible representation of the market that is being assessed. Conflicts of interest can influence the integrity and independence of the benchmark price calculations.
That is why DCA Market Intelligence ensures that the benchmark price calculations are not influenced by the existence of, or the possible emergence of, a commercial or personal business relationship or interest between DCA Market Intelligence and its subsidiaries, staff, customers, market participants, or persons associated with it.
Anyone who identifies a (potential) conflict is required to promptly report it to the management of DCA Market Intelligence. In cases of uncertainty regarding this matter, or the explanation or interpretation of this arrangement concerning a conflict of interest, individuals must seek guidance from the management of DCA Market Intelligence. The report, advice, and explanation are documented in the systems of DCA Market Intelligence.
It is for all DCA Market Intelligence staff involved in the benchmark price calculations, including anyone who has access to the data and or systems of DCA Market Intelligence, prohibited from carrying out work that gives rise to a conflict of interest or damages the integrity, independence, and damages the quality of the benchmark price calculation. All DCA Market Intelligence staff involved in the benchmark price calculations including everyone who has access to the data and or systems of DCA Market Intelligence protect the confidentiality of those data subject to publication of the disclosure obligations of DCA Market Intelligence.
All DCA Market Intelligence staff involved in the benchmark price calculations, including everyone who has access to the data and/or the system of DCA Market Intelligence, sign a declaration in which they declare to abide by the rules regarding conflicts of interest as described above. Upon appointment and annually, in January, the latest version of this is signed and stored in the personnel file.
DCA Market Intelligence makes every effort to avoid a conflict of interest. In the unlikely event that this does occur, DCA Market Intelligence will immediately inform its users and publish it on its website. The same procedure will occur when the conflict is resolved.
Depending on the conflict, an appropriate measure is taken by the management of DCA Market Intelligence. This includes but is not limited to, temporary or permanent suspensions of the persons involved, correction of benchmark prices, adaptations to the method and procedures, phasing out of commercial interests, and blocking access to data and systems of the persons involved.
DCA Market Intelligence encourages users to give as much constructive feedback as possible. Complaints help improve systems and procedures. For the handling of complaints about DCA Market Intelligence, the following applies: a complaint must be submitted in writing to DCA Market Intelligence at the following address: info@dcami.com. DCA Market Intelligence confirms the receipt of the complaint within five working days.
DCA Market Intelligence appoints someone to investigate the complaint and determines what action should be taken. This person can never be the subject of the complaint and can also not be involved in this complaint.
DCA Market Intelligence endeavors to address the complaint as promptly as possible, aiming to do so within thirty days following the confirmation of receiving the complaint. If additional investigation is required, the complainant will be notified, and a new timeframe will be provided, outlining when DCA Market Intelligence anticipates resolving the complaint. The outcome of the investigation and any subsequent actions taken are communicated to the complainant in writing. If the complainant remains dissatisfied with the outcome, they have the option to submit a written appeal within thirty days.
The appeal will be handled by the management of DCA Market Intelligence according to the same procedure and deadlines as applied to an initial complaint. All documents relating to a complaint are stored for at least five years.
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Version: February 2024