Total Trust in Physical Commodity Markets

Introducing Sentinel

Learn more about Sentinel - our innovative solution bringing total trust to the commodities sector.

Start unlocking the physical economy today.

Sentinel is our best of breed market infrastructure platform which helps connect the financial markets to the physical commodity ecosystem.

At its core, Sentinel’s inventory management capability is the catalyst that enables commodity exchanges, banks and trading companies to realise the potential of physical assets through trading, financing and collateralisation.

Securing commodity value

Sentinel’s capabilities support a multitude of business processes from the registering of assets using warehouse receipts, warrants or certificates to the transfer of title which connects producers, storage companies, commodity owners, brokers, financing banks together.

As the system that sits between the physical economy and the financial markets, the artefacts that are created and stored within Sentinel enable the trading of commodities. Through the creation of electronic receipts, warrants or certificates, Sentinel integrates with exchange and member trading systems to effect the change of title and ownership to physical assets.

When it comes to commodity warrants and warehouse receipts, our unrivalled experience through building world-class platforms like ICE Guardian and LMEsword has enabled us to design Sentinel from the ground up with the structure and process required for the effective creation and transfer of warrants, certificates or warehouse receipts. Clients can upload their inventory via our Self Service portal to the web which can be used for exchange or OTC driven RFQ.

Our expertise in the physical commodity markets is encapsulated in our Sentinel platform – saving our clients time and expense in launching new initiatives.

Our knowledge on depository processes which we’ve incorporated into Sentinel to support these has helped numerous commodity exchanges and trading companies solve challenges with compliance, automation, risk and revenue generation.

Sentinel supports also supports physically delivered contracts processing which is a complex and specialist area, whether you’re an exchange that needs to collate positons and run an allocation or you need to inform your clients on which lots they’ve received or need to deliver.

Sentinel powers some of the world’s leading exchanges with sophisticated post-trade software which enables large scale physical deliveries to be processed in the fastest time possible.

Commodity financing and collateral

Commodity financing has been around for centuries and there are many well-established participants in this space but this landscape undergoing another cycle of significant change which in turn leads to opportunity. With a number of larger investment banks moving out of the physical markets, new niche financing houses and market innovations are developing at a rapid rate.

Key to commodity financing operations is being able to accurately identify assets stored in facilities around the world and having that information made available in a trusted and transparent manner. Among the many recent commodity scandals, the Qingdao fraud through which many leading banks caught a significant cold, the importance of transparency and security has never been of greater importance.

Twinned with the ever increasing capital requirements being driven by regulators, firms are being forced to explore new sources of collateral by unlocking the value in physical assets. Sentinel can help our clients extract more value from physical commodities at various stages of the supply chain through enabling commodity financing and collateralisation.

By bringing transparency to the status of the asset including quality, brand, location, storage facility and rent, Sentinel reduces the risk in all financing activities from ‘repo’ deals to Islamic finance related transactions.

Insight into LME Shield

Product & Market Advisory

Developing and launching new commodity market initiatives needs more than just technology. Kynetix assists commodity exchanges, banks and trading companies to solve the challenges in designing products, target operating models and growing business.

Our team’s deep subject matter expertise comes from having held senior executive roles within the leading commodity market participants including exchanges, banks and trading companies.

Our Advisory team has delivered projects which include:

  • Market consultation, market research and feasibility studies
  • Business case and strategy, cost justification and ROI
  • Design of new commodity contracts
  • Liaising and assisting legal definition and opinion
  • Target Operating Model definition
  • Programme initiation, project delivery

Advisory Case Study

We work with a global exchange client in developing a new physically delivered commodities futures contract, advising on the contract design. Our team also managed the overall programme to launch the new contract including the IT project delivery, internal stakeholder management and external participant awareness and education.

During this project, it was clear that the key to a successful launch was to ensure the legal strength of title and ownership was beyond reproach across the many jurisdictions of operation.