China has become a dominant player in global precious metals trading, becoming the world’s largest gold producer and consumer. The Shanghai Gold Exchange (SGE) is today the world’s largest physical gold exchange.
The combination of both Chinese policies (allowing manufacturers the opportunity to scale production) and the trading power of the nation in precious metals is vital for products found in transformative technologies such as electric vehicles, the latest computers and smartphones.
Understandably, efforts are being made to open its markets to foreign investors. Brady in particular has continued to extend the capabilities of its metals trading CTRM platform ‘Trinity’ to address the changing requirements and nuances of metals trading in different regions.
Major investment in Trinity
Against this backdrop the latest update to Trinity, Brady’s flagship metal trading platform, contains a number of features that extend support for both precious metals trading and operations in the Asian marketplace.
The aim of Trinity is to transform how metals are traded, and to support more profitable hedging activities with market risks well managed. A recent major project has been a deployment by a multinational industrial leader for its trading operations in Japan, China, UK, and North America. This deployment formed part of an enterprise-wide digitalisation agenda to underpin the transformation of their metals trading, hedging and risk management activities.
Lowering the cost of trade and increasing profitability are key drivers for companies that deploy Trinity. The product’s heritage is rooted in exchange based metals trading. It is ideally suited to participants trading a diverse range of contracts from forwards, averages, futures, options and leases, seeking end-to-end management of trades and a deep understanding of their P&L in a single global solution.
Organisations will also be able to generate output files to raise official VAT invoices via the Chinese state Golden Tax System. Alongside this, they can produce counterparty documentation – such as confirmations and invoices – in multiple languages including those with extended character sets, such as Chinese Mandarin and Japanese. This ability to set a specific language for each counterparty in the platform is an exceptional benefit of the Trinity platform.
Another ‘stand out’ aspect in Trinity is its pool accounting capability. For businesses that manage material on behalf of their customers, this functionality allows efficient book transfer of metal between counterparties; conversion to and from physical stock, and delivery (e.g. Loco London, Loco Zurich).
The Trinity roadmap is driven by close collaboration with customers, some of the world’s leading metals consuming industrials, producers and derivative trading organisations.
The impact of financial crises in years gone by is still being felt by metals trading participants today. Regulations continue to increase worldwide, with detailed transaction reporting required in many jurisdictions.
In addition to supporting China’s Golden tax regulatory requirement, Trinity has been enhanced to help comply with the latest requirements for Dodd-Frank, EMIR and MiFID regulations. Users generate files for submission to the Depository Trust and Clearing Corporation (DTCC) Global Trade Repository for both North America and Europe together with transaction files for the London Bullion Market Association (LBMA).
The latest Financial Conduct Authority (FCA) programme of prudential reporting reform – IFPR, due to come into force on 1st January 2022, adds further reporting requirements. Trinity can now calculate the K-NPR and K-CON factors for incorporation into those PRR and CRR reports.
These enhancements to Trinity mean that customers no longer need worry about being compliant, as the platform helps do just this, making complex transactions easy to report on across the globe.
Product Director, Commodities Portfolio, Brady Technologies
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