Euronext Inventory Management

As the leading pan-European marketplace, Euronext’s aim is to serve the real economy by bringing together market participants in venues that are transparent, efficient and reliable.

As part of that aim, Euronext is launching a service that supports the dematerialisation of physical commodity products.

Euronext Inventory Management

Transferable electronic certificates & warrants system for commodities.

EIM is an electronic platform, developed by Euronext together with key industry players, aimed at providing a secure, fully transferable, pledgeable title of commodity ownership.

Key features:

  • enhances the existing delivery system
  • increases visibility of Euronext-listed commodities stored in non-Euronext delivery silos
  • supports secure and transferable title for effective trade financing
  • brings more efficiency to trade financing with secure warrants that can be pledged and transferred.

Euronext Inventory Management has been developed to meet the needs of market participants, silos and trade finance banks across the pan-European marketplace. 

Article - Euronext Inventory Management


Article

Euronext Inventory Management: bringing on-warrant delivery and financing to the grain market

Euronext Inventory Management: bringing on-warrant delivery and financing to the grain marketManagement of assets is a vital part of the food industry which connects important sectors of the economy: agriculture, food processing and distribution. The intricate supply chains involved in the sourcing and procurement of agricultural commodities, including the delivery of Euronext-listed commodities contracts, mean a complex chain of paper certificates or emailed storage warrants.

Last year, Euronext began the roll-out of a new service that supports the digitisation of documents of title for physical commodity products. Live since April 2017, Euronext Inventory Management (EIM) is an electronic register, developed by Euronext together with key industry players (cooperatives, traders, corporates, banks such as BNP Paribas, Société Générale and other Euronext member firms), which provides a secure, fully transferable, pledgeable title of commodity ownership.

Designed to meet the needs of market participants across the pan-European marketplace, EIM will be used for Euronext MATIF deliveries. It makes the delivery system simpler and more secure, by replacing the current manual/email process, and replacing it with an automated system.

Euronext and LCH SA are working together on existing Milling Wheat and Corn delivery processes to introduce digital Euronext warrants as a proof of ability to deliver, replacing storage certificates. This will facilitate the swapping of delivery locations between market participants and increase transparency. In the larger context of trade and financing of goods in the future digitised markets, warrants will be used by agricultural commodities users (brokers, clients, silos and banks) to facilitate the trading and financing of listed commodities within Euronext (and LCH SA for delivery silos) approved silos.

Benefits for participants

  • Reduction of risk and simplified operational processes lead to greater transparency, while keeping costs to a minimum
  • Increased visibility of Euronext-listed commodities stored in Euronext non-delivery silos approved for financing deals
  • Warrants on Euronext-listed commodities can be electronically pledged and traded between participants in the system. This will provide further support to physical merchants and all those involved in the finance of commodities, including for repos, and lending/borrowing transactions.
  • Storage facilities will benefit as the new system will make it easier to manage electronic certificates and warrants, and will assist in the administration and enforcement of rent payments. Euronext-approved silos and storage facilities will be able to create and track warrants that can be transferred electronically between approved users of the system, making it easy to use and lowering costs
  • Electronic warrants will be introduced into the Euronext contract delivery mechanism in due course, providing further efficiency and risk reduction opportunities for our members and end users
  • Documentation such as quality analysis reports or traceability documents can be attached to the warrants, facilitating the exchange and trade of goods. Warrants give clear title to goods and they are enforceable, granting creditors further security.

Starting with the digitising of the first storage certificates on 3 May 2018, with no change to the existing LCH SA MATIF CCP delivery process, from H1 2019 (pending regulatory approval) EIM will also cover transferable digital warrants on Euronext-listed commodities.

6 JUN 2018
Linkedin

EIM article from LinkedIn 6 June 2018 (English PDF)