Independent price verification (IPV) is an important part of commodity market risk management. It requires market participants to verify the internal prices they use in their risk modelling and valuation controls against independent third-party pricing.

 

That’s where Skylight IPV comes in. The winner of this year’s Energy Risk Technology firm/product of the year award not only provides a source of consensus data for OTC derivatives across all major asset classes, including commodities, through a cloud-based service, they consolidate and analyse additional complimentary data sources using their proprietary software and technology solutions.

 

“Our clients are dealing with an increased burden of regulation while facing a squeeze on resources,” says Adam McIlroy, CEO at London-based Skylight IPV. “Skylight’s technology helps them to satisfy their regulatory requirements with minimal effort by bringing together multiple data sources onto one platform as well as comprehensively covering their day-to-day price verification data needs through our core service.”

 

Richard Cade, Head of Commodities, explains the commodities offering, “The Skylight IPV system provides independent consensus prices for forwards and options across the spectrum of global energy markets, from power, gas and oil curves to bulk freight and environmental markets. We ingest, clean and aggregate pricing data from clients and return accurate fair value and uncertainty assessments for use in accounting and risk management frameworks”. He continues: “We have integrated our own artificial intelligence infrastructure to verify the accuracy of the inputs in a consistent streamlined fashion and combined with the latest technology and market-leading expertise we return the most accurate reflection of mid-market derivatives pricing in the industry”.

 

Adam cites the agility of its service development as a key differentiator - “Markets and regulations are constantly evolving, so we must remain dynamic and adaptable to deliver the best service for our clients to help them manage their risks in an optimal way.

 

Our cloud-based platform allows for rapid delivery of enhancements while code efficiencies mean we are able to deliver highly accurate results quicker with substantial cost savings compared to our main competitors.”

 

“Critically, the adaptability of our systems has enabled Skylight to advance consensus pricing to the next level. New, complimentary datasets utilising market transactions are available providing clients with functionality that they have struggled to develop themselves.”

 

The company, which was founded in 2016, is growing strongly. It has increased the size of its team by 25% in the last 12 months to handle a growing client base. Richard says that, in energy forwards alone, data input volumes increased by over 50% in 2022, location coverage by 35%, and publication volumes by over 20%.

 

Adam concludes, “2023 and beyond look to be very exciting for us. We’re already in discussions to add more of the largest market-makers to our service which will enrich our consensus data offering and we’ll also be providing more in depth analysis using transaction data overlays.

 

We are launching our new R² (R-squared) product soon to help risk and valuation teams meet their back-testing regulatory requirements.

 

And then there’s all of the impressive back end work that the end-user may not see – making our systems more secure, stable and extendible enhancing our clients overall experience.”

 

The industry is equally excited about what Skylight IPV has to offer - “This is more powerful than anything we could do in-house,” commented a client at a major US bank.