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Clarity onCommoditiesTradingAn industry under the spotlightResults of KPMG's 2016 global surveyApril 2016InterviewProfessor Craig Pirrong of the Universityof Houston shares his insights into thefuture of trading.Forces of changeHow are regulation, sustainability andmacroeconomic events reshaping thetrading industry?Implications for tradersWhat is next?

20422 28PART IPART IISynopsisand hypothesesThe tradingenvironment:An overviewPART IGlobal surveykey findings18PART IInterview withProfessorCraig Pirrong4024PART IBasis andmethodologyPART IIThe tradingenvironment:Impacts oncommoditiestraders

Clarity on Commodities TradingContentClarity onCommoditiesTrading03EditorialPART I04Global survey key findings18Interview with Professor Craig Pirrong22Synopsis and hypotheses24Basis and methodologyPART IIThe trading environment: An overview···········GlossaryBEPSCOP 21CRDCTREMIRFinfraG/FMIAKPILNGMiFID IIOECDROIThe impact of collapsing commodity pricesThe growing regulatory burdenSustainability climbs up the agendaBase Erosion and Profit ShiftingUnited Nations Conference on Climate ChangeCapital Requirements DirectivesCorporate Tax ReformEuropean Market Infrastructure RegulationFinancial Market Infrastructure ActKey performance indicatorLiquefied natural gasMarkets in Financial Instruments Directive IIOrganisation for Economic Co-operationand DevelopmentReturn on investment3048Changes expected to strategies andoperating modelsInvestment trends in the current environmentAdopting savvier long-term financing strategiesThe terms "commodities traders" and "traders" are usedinterchangeably for the purpose of this publication. All referto commodities trading houses or to commodities tradingoperations of broader organizations.50P I N B OA R D51C O N TAC T S3337The trading environment: Impactson commodities traders43441

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Clarity on Commodities TradingEditorial3Making the worldgo roundRichard SharmanGlobal Head of Commodities TradingThe critical nature of this industry is prompting calls forbanking-style regulation. To us, this misses the mark. Theindustry acknowledges the need for greater transparencybut requires a relevant, coordinated and less expensiveapproach to regulation.Commodities make the world go round. While consensussuggests the low-price environment is here to stay, it lookslike medium-term structural fundamentals will ease theworries about maintaining volumes. The shadow of Chinaand the spotlight of regulation, however, are beginning toreduce the perception of opacity regarding this industry.In light of the importance of this sector to the global economyand its complexity we have launched the first global survey ofcommodities trading. In what will be an annual series, oursurvey seeks to give a voice to industry participants as wellas improve awareness among observers. We look at keyexternal drivers such as regulatory and macroeconomictrends and how traders and their business strategies areresponding to the range of opportunities and threats.We hope you find the publication insightful, and we wouldbe happy to discuss with you the implications of the issuesraised for your own organization.Richard Sharman

4Global surveykey findingsThe trading environmentFinancing and investments 70 percent of respondents found lowcommodity prices to have a negative impacton their businesses. Restricted access to funding is affectingone-third of respondents through increasedfinancing costs. 51 percent of respondents expect commodityprices to stay at current low levels for a furtherone to two years with energy prices expectedto increase first. 30 percent have diversified sources offinancing in order to maintain sufficientaccess to capital. Both low commodity prices (21 percent ofresponses) and the slowdown of economicgrowth globally (18 percent) are expectedto be the biggest challenges to tradingbusinesses over the next one to two years. 88 percent are experiencing "some" or "strong"pressure on trading margins. Almost one-quarteris revising their strategies as a result, and22 percent are discontinuing certain businessactivities. 25 percent see most potential to invest inupstream assets, 30 percent in midstreamassets and 39 percent in downstream assets. North America is the region with the greatestgrowth potential, at one-fifth of responses. Most respondents said ROI on investmentsin the past one to two years had met orexceeded expectations. This was led byenergy (72 percent) and metals (73 percent)traders. By contrast, agricultural tradersgenerally experienced returns over the sameperiod that were either negative or did notmeet expectations.

Clarity on Commodities TradingPart I Global survey key findingsRegulationSustainability 27 percent see greater regulation as the mostdisruptive factor in commodities trading in thelonger term. This compares to 16 percent citinggovernment interference in the free market and15 percent saying it is the impact of policychanges on demand. More than one-quarter of respondents expectcarbon emissions to impact their businessmost over the next one to two years; 24 percentmeanwhile expect energy consumption tohave the biggest effect. One-third of respondents expect regulation tohave a "medium" impact on existing operations.One-third meanwhile thought the impact is notyet clear. One in five state that complexity of regulationsis the main challenge in compliance. This isfollowed by the increased costs of compliance. Expectations of what will drive the higher costof compliance were evenly split between furtheruse of external advisors, hiring legal and/orcompliance personnel, allocating existing staffto compliance topics and additional investmentsin information systems. MiFID II leads the perceived compliance burden. 43 percent anticipate global warmingto negatively or strongly negatively affectcommodities trading in the long term.39 percent expect barely any impact. Global warming’s impact is most felt throughsevere weather (38 percent), stranded assets(27 percent) and resources not being available(20 percent). 17 percent of respondents said their organizationhas a board commitment to sustainabilityand 12 percent stating that their firm includessustainability in its KPIs.5

6CreativeflexibilityCommodities traders have historicallyproven flexible in adapting strategiesto their evolving environment. This willremain the case, with agile businessmodels and financing being required.Financing deals will become morecreative as traders use financial partnersto drive maximum leverage and reducerisk while focusing on opportunitiesto maximize profits in operations andenter into offtake agreements.

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ClarityClarity onon CommoditiesCommodities TradingPart I Key messagesStabilityamidvolatilityDespite a volatile environment drivenchiefly by China’s transition to aconsumer-led economy, the tradingindustry is not expected to see anymajor structural change. Traders willcontinue to be wary about spendingon any significant transformationalcapital investments. It is in the areaof financing structures where somechange will be seen, as modelscontinue to evolve in the search fornew sources of long-term capital.9

10RegulateddisruptionSeen as the biggest long-term disruptor ofthe trading industry, regulation is perceivedby the industry as complex, piecemealand expensive. There is a fear that it willcontribute to smaller traders being drivenout of the market while large traders becomeeven larger – creating a less competitivemarket. The trading industry must continueto engage with regulators to achieve morepractical and globally aligned regulations.

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ClarityClarity onon CommoditiesCommodities TradingPart I Key messagesSurvivalof thefinanciallyfittestWhile asset-heavy traders are cuttingback or postponing planned investments,firms with sufficient access to financingwill naturally be better positioned tobenefit from the current environment.Opportunities will present themselvesfor strong price negotiation and prepayment structures, although counterpartyrisks must be kept in mind. In this priceenvironment, size matters.13

14Climateof changeSevere weather impacts, stranded assetsand the unavailability of some resourcesare expected to be global warming’s biggestimpacts on the industry. Climate changeregulations and laws will most likely affectcommodity flows by encouraging a movetowards renewable energy sources andcleaner fossil fuels such as LNG. Climatechange policy amendments, while expectedto have greater impact on the most verticallyintegrated businesses, will undoubtedlyimpact the whole industry.

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ClarityClarity onon CommoditiesCommodities TradingPart I Key messagesStrategicallyprivateRather than going public, equity will beraised through increased use of strategicpartnerships. The industry has becomeattractive to new sources of funds thatare well suited to the entrepreneurialnature of commodities traders. Tradersmay find it necessary to enhance thecapabilities of their treasury functions,however, to deal with more complexfinancial arrangements.17

18Dr. Craig PirrongProfessor of FinanceUniversity of Houstonand guest Professorat University of Geneva

Clarity on Commodities TradingPart I InterviewProfessor Craig Pirrong,Professor of Finance at theBauer College of Business,University of Houston,and guest Professor at theUniversity of Geneva,shares with us his insightsinto current trends in thecommodities tradingbusiness and where hesees the industry headingover the coming years.KPMG: Collapsing commodityprices have dominated thesector’s news over the pastyear. Do you see the price trendas a negative or a positive?Professor Pirrong: For businessesand end users, low prices are ofcourse a good thing in this era ofcost control – but not necessarilyfor commodities traders. You haveto distinguish between the causesof low flat prices. Low flat pricesdue to high supplies are good fortraders, because high suppliestranslate into high volumes andhigh margins. Low prices due to19The future ofcommoditiestrading:Impacts anddriverslow demand, on the other hand,are not good at all for traders,as they result in lower volumesand therefore lower margins.It does mean traders have lessroom for error before marginerosion starts to hurt them, butI don’t see business modelsreally changing as a result. Tradersthat are struggling may becomesmaller and be forced to focusmore narrowly. This gives rise toopportunities for the larger players,however, to move into the marketsegments the smaller playersare exiting, or even to acquire thesmaller players through M&A.KPMG: Against this backdrop,how do you see regulationimpacting the sector?Professor Pirrong: The realwildcard is the impact on capitalrequirements. Depending onexactly which, and how regulationsare implemented, capital requirements could prove to be a massiveburden. Also the costs of compliance will add up and will increasethe cost of doing business. It willmake trading less profitable. Again,the biggest impact will be seen onsmaller traders, some of whom mayeven be driven out of the market.

20significantly as a resultof a heavy midstreamasset footprint. There’salso a serious risk thatcurrent conditions couldlead to stranded assets.KPMG: And in terms offinancing, what trendsdo you anticipate?Ironically, a policy thatis supposedly intendedto address “too bigto fail” problems mayfavor the bigger firmsat the expense ofsmaller ones.KPMG: Where do youanticipate investmentstaking place in thisenvironment?Professor Pirrong:If demand for commodities remains low,I think we will seeless investment inmidstream assets over the longerterm. Even though they are generallyless risky than upstream assets,midstream assets make tradersIronically, a policythat is supposedlyintended to address“too big to fail”problems may favorthe bigger firmsat the expense ofsmaller ones.more vulnerable to slowdownsin volumes and flows. You canalready see some companies inthe USA, for instance, sufferingProfessor Pirrong:The first thing I wouldsay is that there will beno move towards publicequity, as this justdoesn’t make sense atthe moment. I expectfinancing structuremodels to remain stable– as they have beenfor some time – in theabsence of anythinghappening in theregulatory field toreally change this. Forcommodities traders,it’s their businessstrategy that drivesthe financing approachrather than the otherway round. Sometraders have becomepretty clever in puttingin place long-termfunding strategieswithout sacrificing thecore part of theirbusiness. These strategies most notablyinclude spin-offs,minority shareholdingsand very long-termdebt. One change I seeas possible over thecoming years is private equity’sentry into the market. Privateequity is a very good complementto the private nature of trading.

Clarity on Commodities TradingPart I InterviewHow attractive the commoditiestrading sector appears to privateequity houses, of course, dependson whether the trading industrycontracts. I can see privateequity being a useful source offresh growth.oversupply leading to a shift inLNG such that it becomestraded more like oil. LNG willalso be boosted by negativedevelopments in coal, which isvulnerable due to threatsfrom renewable energy sourcesas well as growing environmentalconcern. In the metals segment,capacity really needs to bewithdrawn from the market. That,like most of the trends we’vediscussed, will play out over thelong term.KPMG: Speakingof future trends,can you give usyour prediction ina nutshell?Professor Pirrong:It goes withoutsaying that the scaleof the trading industry will be verymuch determinedby macroeconomicdevelopments inemerging markets,especially in China.These have thecapacity to impactgreatly commoditydemand, specificallyfor the metals segment, with reduceddemand and lowerinfrastructureinvestments. Onthe other hand, Isee a bright futurefor LNG as a tradedcommodity. In myview, an oversupplyin LNG might bea very good thingfor traders, as itwill undermine thetraditional modelof LNG beingcontracted underlong-term contractswith little spot trade.In other words,I can really see21I see a bright futurefor LNG as a tradedcommodity. In myview, an oversupplyin LNG might be avery good thingfor traders, as it willundermine thetraditional model ofLNG being contractedunder long-termcontracts with littlespot trade.

22Synopsis andhypothesesRecent years have seen the rise ofcommodities trading giants, whoseactivities represent a significantpercentage of the global volume oftrade in specific commodities. Thesecompanies have assumed positionsover trading flows and, increasingly,assets in oil, metal ores and agriculturalgoods that were once controlled byintegrated multinational corporates.This has given rise to an extremelyinteresting and complex industry thatjustifies greater analysis. As the sectoremerges into the light from relativeopacity, trading activities are becomingmore visible and more intelligible topersons outside the sector, whether toclients, suppliers, bankers, regulatorsor lay investors.Traders were impacted by 2015’scollapse of commodity prices inalmost every sector, in part due tomacroeconomic changes such as aslowdown in China’s growth, recessionin Brazil and Russia, hesitant economicrecovery in Europe and the growingstrength of the US dollar. Combined,these factors produced a set ofcircumstances that have put enormouspressure on parts of the commoditiesproduction and trading industry.Against this backdrop, we felt it wastime to take the industry’s pulse. Whois feeling the pressure and why? Who ischanging strategy and how? What arethe new markets? Will traders continueto invest in assets? How much pressureexists on margins? How are tradersadapting to the new environment? Andhow are they dealing with regulation?Is sustainability a topic for traders?

Clarity on Commodities TradingPart I Synopsis and hypothesesIn this context, we set out to test the followingthree hypotheses.Our hypothesesOur conclusionTraders need to rethink how, where and in whichsectors they deploy capital in light ofthe slowdown of growth in China andthe continued slow rebound in otherregions that is impacting commoditiespricing, capital allocation/infrastructureinvestment and trading strategies. Caution will reign over the purchase of production assetsdue to their relative lack of flexibility and price dependency. The focus on logistics assets will meanwhile grow forthose assets that can enhance supply chain efficiency andtrading margins. Agriculture will see relatively restrained investment activity.Those investments that do take place will be mostly inmidstream assets. Interest is growing in upstream metals mining assets,particularly as the current price environment allows forbargain purchases. Energy investments will focus onmidstream (storage) and downstream (distribution) assets. structure, operate and portraythemselves in a more enterprise-driven,stakeholder-friendly and possiblyless entrepreneurial manner dueto regulatory and compliancepressures. The changing environment presents an impetus for tradersto engage more with stakeholders on particular topicssuch as sustainability. The industry is set to become more transparent throughenhanced reporting obligations and greater stakeholderscrutiny. While these changes will impact all industry participants,they are likely to weigh heaviest on smaller traders dueto the resources required to comply with stakeholder andregulatory requirements. It is critical that traders proactively engage and collectivelyinteract with regulators and stakeholders to provide greaterclarity for what has historically been an opaque industry. look for alternative sources offinance due to changes in volumes,costs, risk profile and availability. There is an increase in long-term funding strategies thatavoid the need to sacrifice control of the core business.Structured financing is on the rise. Raising equity through strategic partnerships is hugelypreferable to more traditional routes such as a publiclisting, which may be the preserve of traders investingheavily in fixed assets. Funding through private equity looks set to play anincreasingly active role.23

24Basis andmethodologyTHIS GLOBAL STUDY IS BASED ON ACOMBINATION OF 7 PERSONALINTERVIEWS AND AN ONLINE SURVEYOF 80 RESPONDENTS.

Clarity on Commodities TradingPart I Basis and methodology25Online survey80 individuals responded to an onlinesurvey that we circulated to our broadcommodities trading network.Location of respondents’ global HQsRespondents’ companies’ global revenue12%16.3%26.2%27%30%7.5%11%4%50%6%10%Asia PacificSouth AmericaMore than USD100 billionUSD5 billion to USD10 billionEuropeNorth AmericaUSD50 billion to USD100 billionLess than USD5 billionUSD20 billion to USD50 billionNot known or prefer notto discloseUSD10 billion to USD20 billion

266%2%Respondents’ trading activity by segment(select all that apply)20%6%Respondents represented traders from a rangeof commodities, notably energy (52 percent),metals (22 percent) and agricultural produceand livestock (17 percent).14%Agriculturalproduce and livestock20%14%18%OtherCereal grainsCoffeeOil seedsCocoaSoybeansLivestock and meat9%SugarCotton17%Respondents’ tradingactivity by segmentIndustrial metals(e.g. copper, zinc, aluminum, nickel,iron ore)52%22%8%22%Precious metals(e.g. gold, palladium, platinum, silver)13%11%Energy15%21%Metals89%21%Crude oilNatural gasCoalOil productsPowerBiofuels

Clarity on Commodities TradingPart I Basis and methodology27Face-to-face interviewsWe conducted seven face-to-face interviewswith C-level executives of major tradinghouses (those with revenues in excess of USD50billion). The outcomes of these interviewshave been incorporated into our analysis, givinga better grasp of the changes the industryis undergoing.Respondents’ rolesCEO/President/Managing nology director1%Other C-level executive3%SVP/VP/Director15%Trader9%Head of business unit4%Head of department18%Other17%

28The tradingenvironment:An overview

Clarity on Commodities TradingPart II The trading environmentRegulation and sustainabilityare climbing quickly upboardroom agendas.Traders need to continueengaging with the wide rangeof stakeholders on theseissues. Together with thegeneral price environment,the challenges facingtraders over the comingyears remain substantial.29

30ALMOST EVERY SECTOR SAW COMMODITYPRICES COLLAPSE OVER THE COURSE OF 2015.TRADING COMPANIES THAT HAD LIMITEDEXPOSURE TO PRICE RISK BY MINIMALINVESTMENTS IN INFRASTRUCTURE ASSETSEXPERIENCED SOLID TRADING CONDITIONS.ENERGY TRADING COMPANIES PERFORMEDPARTICULARLY WELL DUE TO HIGHLY VOLATILEENERGY PRICES. AGRICULTURAL AND METALCOMMODITIES TRADERS, BY CONTRAST,ARE SEEING FLAT PRICES DUE TO ONGOINGEXCESS SUPPLY. IN THIS PRICE ENVIRONMENTSIZE MATTERS, AND THE ABILITY TO RIDE OUTTHE CYCLE WILL BE KEY.The impact ofcollapsingcommodity pricesSeventy percent of respondents were concerned aboutcurrent low commodity prices, especially where they arethe result of low demand (i.e. lower volumes) due to aslowdown in economic growth. There is less concern overlow prices that result from oversupply as long as tradingvolumes are maintained. Unsurprisingly, respondents withlarger asset bases were much more negatively exposed tolower commodity prices than their asset-lighter peers.Ultimately, this means size matters. Trading companieswith sufficient access to financing, as well as the degreeof sophistication required by the new structures, are betterpositioned to benefit in the current environment.In the outlook for the next one to two years, the biggestchallenges continue to be low commodities prices, aslowdown of economic growth globally and pressure ontrading margins (see graph on opposite page).Size matters in the current environmentLow commodity prices also raise concerns over counterpartyrisks (most notably where sanctions are involved), althoughdistressed upstream producers and national oil companies indesperate need of revenue are providing opportunities forprepayment structures and strong price negotiation.As one respondent put it:“Strategy in the sector is now shifting to areverse beauty contest. It’s the producerswho now badly need marketing.”“People with access to USD100 millionfacilities can leverage that very powerfullyin today’s market.”Low prices are expected to persistA slight majority of respondents expect commodity pricesgenerally to stay at the current low levels for a further oneto two years.How long do you expect commodity prices(in general) to stay at the current low level?Less than 1 year15%Between 1 and 2 years51%Between 2 and 5 years34%Between 5 and 10 years0%More than 10 years0%

Clarity on Commodities TradingPart II The trading environmentMetals: Excess capacity prevailsRespondents are most positive about a recovery of pricesfor energy and agricultural products. Few expect metalsprices to rebound as they are linked to construction andinfrastructure.“Aluminum, copper and iron ore arevulnerable as linked to China”.As China moves from an investment-led to a consumption-ledmodel, demand for metals may slow further. In addition,many new mines began operating as companies sought tobenefit from the China boom, therefore increasing supply.A rise in metals prices may therefore depend on a withdrawalof capacity from the market. This is a long-term process.Mine closures can be unattractive due to political reasons(e.g. job losses) and substantially lower costs.What do you see as the biggest challenges foryour business in the next 12 to 24 months?Select up to threeLow commodity pricesAs one interviewee optimistically stated:“Consumption is rising in China, so thatshould be good for oil volumes.”LNG: Is oversupply a positive?Oversupply in the LNG market may be a good thing fortraders, as it undermines the traditional model of LNGbeing contracted under long-term contracts with little spottrade. LNG trading may consequently move towards the oilmodel. New trade flows will be created as the abundanceand arguably lower negative environmental impact of LNGhas strong potential to displace coal.21%Slowdown of economicgrowth globally18%Pressure on tradingmargins14%Impact of regulations onability to carry out business14%Slowdown of economicgrowth in emerging markets11%Lack of access to capitalor credit6%Lack of market volatilityManaging commodityprice exposureProspect of tax increasesOil: Two to three years for the market to rebalanceAll oil producers are looking to reduce costs. The shortterm, therefore, will see no significant reduction in oil supply.If oil prices rise, supply will increase accordingly and capthe price. Current abundant supply might be similar tothe situation at the beginning of the most recent 20-yearperiod of flat, low prices that started in the mid-1980s.Furthermore, the geopolitical environment suggests nobasis for market coordination. It may take two to threeyears to rebalance the oil market. One interviewee noted:“There are many variables, for example how demand willevolve in China”. A successful transformation of theChinese economy is key to a fresh balance in the market.31Managing geopolitical riskOther5%4%3%2%2%

32North America has the greatest growth potentialRespondents believe the following regions possess thegreatest opportunities for business growth over the nextone to two years, in order of highest potential first: North America China Asia (excluding China and India) AfricaPotential disruptors: Regulation leads the packThe biggest long-term disruptors for commodities tradingare seen to be increased regulation, government interferencein the free market and policy changes affecting demandfor energy sources. It is becoming increasingly clear thattraders must consider these non-market forces in theirfuture strategies.Interestingly, given the current commodity price environment,these areas align exactly with where most respondents’business growth has taken place in the past 12 to 24months. Most respondents believe the majority of newbusiness growth in energy-related commodities will comefrom North America. They are also positive in their businessgrowth expectations for India but less optimistic aboutRussia and Brazil. Some feel, however, that India’s businessenvironment may inhibit economic growth, particularlywhen compared with China. Overall, respondents citedthe slowdown in emerging markets’ economic growth asnegatively affecting their businesses.Which developments do you see as most disruptivefor commodities trading in the longer term?Select all that applyIncreased regulation27%Government interferencewith the free market16%Policy changes affectingdemand for commodities15%New competitors10%Increased financing costs10%Producers bypassing commoditytraders in (more) direct sales9%Increased price transparency8%Global warmingOther4%1%

Clarity on Commodities TradingPart II The trading environmentThe growingregulatory burdenRespondents feel that, despite an international regulatorypush, the lack of an aligned global regulatory agenda isleading to a misalignment in terms of objectives, rules anddefinitions. Multinational commodities traders must dealwith separate and differing regulatory regimes and agendas.While traders wait to see what the ultimate effect ofupcoming regulatory change on their operations willbe, the majority of respondents expect the following:How great an impact do you expect regulation tohave on existing operations?13%ALONG WITH CHINA, REGULATION IS THE BIGGESTDISRUPTOR TO THE WAY THE INDUSTRY OPERATES.IT HAS ARRIVED PIECEMEAL, COMPLICATED ANDEXPENSIVE. HOWEVER, TRADERS WILL NEED TOENGAGE IN FINDING MORE GLOBALLY COORDINATEDSOLUTIONS THAT ARE RELEVANT AND MORE COSTEFFECTIVE TO ALL INDUSTRY PARTICIPANTS.CONCERN (AND SOME FRUSTRATION) IS DRIVENBY WHAT TRADERS PERCEIVE AS REGULATORS NOTFULLY UNDERSTANDING THE TRADING BUSINESSAND THEREFORE NOT KNOWING WHAT OR HOW TOREGULATE THE COMMODITIES MARKETS.These impacts are expected to be driven primarilyby the following regulations:Which regulations do you expect to have (or arealready having) an impact on your business?Select top threeMarkets in Financial InstrumentsDirective 2 (MiFID II)European Market InfrastructureRegulation (EMIR)33%Dodd-Frank Act23%Corporate TaxReform III (CTR III)Base Erosion and Profit Sharing(BEPS)Financial Markets InfrastructureAct (FMIA / FinfraG)Regulation on Market Integrityand Transparency (REMIT)Securities and Futures Act (SFA)31%OtherBasel IVSignificant (e.g. consideration of change in business structure/location, significant system changes, change in business model)Limited (e.g. under discussion)Extractive IndustriesTransparency Initiative (EITI)Not yet clearMedium (e.g. reconfiguration of systems/reporting,employee training, hiring etc.)1st choice2nd choice3rd choice33

34Respondents see the key challenges for traders asbeing the complexity of regulations, increased costsof compliance and monitoring compliance.What are your main challenges in complying withlaws and regulations?Select all that apply4%MiFID II: Increasing the burdenIt is not surprising that the complexity of regulation is seenas the primary challenge; MiFID II’s terms are still to bedefined in detail. In February 2016, the European Commissionpublished a proposal to postpone MiFID II’s application dateby one year to 3 January 2018 to allow for the complextechnical infrastructure necessary for its implementation.While this anticipated delay gives companies a brief respiteto set up and/or adjust internal systems and processesaccordingly, compliance will be costly and time-consuming.3%6%BEPS and CTR III: Changes, documentation anduncertain in

Clarity on Commodities Trading 3 Making the world go round Richard Sharman Global Head of Commodities Trading Commodities make the world go round. While consensus suggests the low-price environment is here to stay, it looks like medium-term structural fundamentals will ease t