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Governance

Sling Index Governance Committee

EMC, as the administrator of Sling, has established a Sling Index Governance Committee (IGC) which shall be responsible for maintaining the governance framework for Sling.

The IGC shall establish credible and transparent governance procedures for the Sling index determination process, including an oversight function for the development, issuance and operation of the Sling index.

The IGC shall have the authority to:

  • review and challenge all aspects of the Sling index determination process, including the representativeness of the Sling participants, their corresponding assessments submitted, and activities undertaken by the Administrator in performing its role;
  • review and approve changes to the development, issuance and operation of the Sling index. This includes requesting the Administrator to undertake consultations with stakeholders on such changes; and
  • review and pass judgment on cases referred to it by the Administrator or the Appeals and Complaints Officer, as the case may be.

The responsibilities of the IGC under the IOSCO Principles for Financial Benchmarks (see below) shall include the following:

  • Oversight of the benchmark design
  • Oversight of the integrity of the Sling index determination and control framework 
  • Oversight of the representativeness of the Sling participants and their corresponding assessments submitted 
  • Establishing and maintaining the framework for the oversight of activities undertaken by third parties, if any, on the benchmark determination process 
  • Oversight of cases reported by the Administrator or the Appeals and Complaints Officer, including but not limited to formal appeals and complaints, and ensuring that they are in line with the terms of the Sling Appeals and Complaints Procedure Policy
  • Oversight of the processes and procedures with respect to industry consultations with the market and any advice and/or recommendation made by the IAC

Sling Index Advisory Committee

EMC as the administrator of the Sling will establish the Sling Index Advisory Committee (IAC) which is responsible for providing advice and/or recommendations on all matters referred to it by the Index Governance Committee (IGC). 

Such matters may include the following:

  • Design of the benchmark index
  • Integrity of the SLInG index determination and control framework
  • Representativeness of the SLIng participants and their corresponding assessments submitted
  • Other matters related to the overall administration of the SLInG Index

The IAC will comprise senior market practitioners from the LNG industry, thereby providing an independent link between the market stakeholders and EMC as the index administrator. This ensures that the general administration of the index is independently verified on a regular basis. The IAC will consist of 10 Members, including the Chairman.

 

IOSCO Principles for Financial Benchmarks

The International Organization of Securities Commissions (IOSCO) is the international body that brings together the world's securities regulators, and is recognised as the global standard setter for the securities sector. The IOSCO develops, implements and promotes adherence to internationally recognised standards for securities regulation, with different standards for different uses.

The IOSCO developed the Principles for Financial Benchmarks (PFB) in light of investigations and enforcement actions regarding attempted manipulation of major interest rate Benchmarks.  The IOSCO’s objective is to create an overarching framework of Principles for Benchmarks used in financial markets, to articulate policy guidance and principles for Benchmark-related activities that will address conflicts of interest in the Benchmark-setting process, as well as transparency and openness when considering issues related to transition.

Given the strategic importance of the Sling benchmark, EMC as the benchmark administrator seeks to adhere to the PFB even though there is no regulatory requirement to do so. These efforts have also given index participants greater confidence in taking part in the Sling price assessments. 

EMC has worked with KPMG to conduct an assessment of the Sling process' adherence to the IOSCO Principles of Financial Benchmark.