Koch Supply & Trading is a subsidiary of Koch, Inc – the second largest privately held company in the United States. Koch has a significant commodities trading business across a range of energy products. 

Skylight IPV is a leading provider of consensus pricing for derivative market makers across Commodities, Credit, Equities, FX, and Interest Rates.

Here Jason P., Koch's Head of Global Gas Middle Office, takes us through the decisions made when replacing an incumbent IPV provider with Skylight IPV.

“I was tasked with reviewing our existing IPV systems - identifying deficiencies and recommending improvements that could be made.  Our valuation function is key to minimising trading risk and I knew that any recommendations I identified had to ensure our processes remained robust and any data used had to come from a trustworthy source.

We have high expectations of our systems and of any third-party services that are used in our valuation process.  We need services to deliver prompt responses to our customer support queries from people with strong and relevant Commodities expertise.  So I reached out to Skylight IPV as a potential new IPV provider.” 

Koch’s requirements?

In line with all derivative trading firms, Koch required a robust and trustworthy source of independent price verification to meet its risk, valuation, audit, and regulatory needs.

The key consideration was access to responsive and knowledgeable product specialists, who could speedily answer queries and proactively work with Koch to offer suggestions and provide a helpful ongoing dialogue. A professional relationship with named individuals who partnered with Koch from the initial outreach through on-boarding and then as permanent account managers was crucial here. 

“The Skylight team’s market knowledge and high level of customer service was evident from the start, and has continued long past the testing and on-boarding phase.  I know that if my team has a problem we can reach out to a single point of contact and receive a response by email or phone call within a timeframe that allows us to still meet our reporting deadlines.” JP

Why did Koch choose Skylight?

“We decided to take the step to completely replace our incumbent IPV provider.  This required review and approval from all of the stakeholders including the trading desk and senior finance personnel.  The potential benefits were evident to see for all.  With assistance from the Skylight team, product and IT, we were able to completely replace our system with Skylight’s service, and we continue to see innovative product enhancements that really aid and streamline our daily IPV process. “ JP

Koch’s main reasons for choosing Skylight were:

• Transparency - Skylight provides a complete view of all acceptances and rejections alongside comparison to other contributors’ anonymised marks. This significantly reduces the need for challenges as Koch is able to view the same data sets that Skylight can see.
• Accessible product expertise - Each of Skylight’s asset-class product heads has 20+ years of applicable experience. Direct communication with the relevant product head is actively encouraged, and allows meaningful discussion and feedback to occur.
• Cost-effectiveness - Skylight’s straightforward, flat-fee inclusive structure ensured that Koch could accurately budget-plan without any concern of hidden fees. 
• Customer service - Consistent, timely responses directly from product experts, without the need to be triaged through a chat-bot or automated system, meant that all of Koch’s queries were dealt with accurately and efficiently.
• Ability to test before committing - Skylight’s testing period allowed Koch to become familiar with the service and guarantee that it was the right solution before committing to pay for the service.
• Streamlined onboarding - A simple onboarding process including an API, with support and advice available at any time, meant that Koch readily moved from manual testing in UAT to automated submissions and receipt of results within Skylight’s Production environment.

Skylight IPV was established to deliver IPV services in a responsive, client-focused way. Our team of IPV experts, with their unrivalled industry experience, design and deliver creative and adaptable IPV solutions that respond to evolving regulatory requirements. It is extremely encouraging to know that our approach is paying dividends for our valued clients. 

“We are very pleased to have become the partner of choice for the Koch team.  It is great to hear that we helped ensure a quick, easy and smooth transition from their previous solution.  We look forward to building on the close relationship that we have fostered in order to continue beating Koch’s expectations in the long-term – just like we do for all of our clients.” Richard Cade, CPO