Independent auditor PricewaterhouseCoopers LLP (PwC) has undertaken the first annual audit to test the design and operating effectiveness of the Baltic Exchange’s controls for its market benchmark services.

The 73-page report, voluntarily commissioned by Baltic Exchange Information Services Ltd (BEISL), audited the controls implemented by the Baltic Exchange in relation to the bulk freight market which are designed to be robust and comply with the various national and international regulations and principles.

The opinion provided PwC was issued over the Baltic Exchange’s controls as at 31 January 2021 in relation to the requirements set down within the UK Benchmarks Regulation; the IOSCO Principles for Financial Benchmarks; the IOSCO Principles for Oil Price Reporting Agencies as well the Baltic’s own Guide to Market Benchmarks.

Baltic Exchange Chief Executive, Mark Jackson said:

“This is an important report and provides further assurance to the users of Baltic Exchange data that they are settling trades and making important commercial decisions based on information which is audited, verifiable and completely independent. We have invested considerable resources into driving operational excellence, commitment to index quality, reliability and market representativeness which will benefit our customers and other related stakeholders.”

Baltic Exchange Chief Financial Officer, Mark Read added: 

“The global transportation sector does have a choice when it comes to benchmark assessments of the cost of moving commodities or goods by sea. The Baltic Exchange, however, was one of the early adopters of the Benchmarks Regulation within the maritime industry to become authorised and regulated by the UK Financial Conduct Authority. This independent external accreditation which extends our coverage not only to regulatory requirements and the IOSCO Principles for Financial Benchmarks but to IOSCO Principles for Oil Price Reporting Agencies provides further confidence to our customers and users worldwide that rely on our benchmark assessments across the bulk  freight markets, including LNG.” 

The Baltic Exchange has an established reputation for reliable, robust and transparent methodologies which is underpinned by strong index governance. The Baltic Exchange’s commitment to providing best practice standards in the integrity of index production, user confidence and governance has seen it substantially increase the range of data it now publishes to include container rates and air freight.