Commodities Effectiveness Testing

CNS Treasury’s Commodities Effectiveness Testing automates compliance with IFRS9, evaluating commodity hedge performance in real time. This feature simplifies regulatory reporting and supports informed adjustments to hedging strategies.

Commodities Effectiveness Testing

CNS Treasury’s Commodities Effectiveness Testing feature automates the evaluation of commodity hedges to ensure they meet the criteria set out by IFRS9 standards. This functionality enables treasury teams to assess whether their commodity hedges, such as swaps or options, effectively mitigate the price volatility of underlying commodities like oil, metals, or agricultural products. Both prospective (before the hedge begins) and retrospective (ongoing) tests are conducted, providing a full view of hedge performance over time and supporting timely adjustments to hedging strategies as needed.

Key Features and Benefits

Automated effectiveness testing in CNS Treasury calculates the alignment between the hedging instrument and the commodity exposure, ensuring accuracy and compliance without manual intervention. Treasury teams receive real-time results and visual indicators, enabling them to quickly identify any hedge ineffectiveness and adjust their strategies accordingly. This functionality simplifies the regulatory compliance process and enhances risk management, as treasury professionals can focus on decision-making rather than manual testing procedures.

Integrated Compliance and Reporting

The Commodities Effectiveness Testing feature integrates with CNS Treasury’s reporting and accounting tools, creating a comprehensive audit trail for each hedge. Automated documentation generation and test results support IFRS9 compliance, while easy access to historical effectiveness data provides valuable insights into hedge performance over time. This integration ensures that organisations can maintain transparent, accurate records and adhere to regulatory requirements with minimal administrative effort.

CNS Treasury’s Commodities Effectiveness Testing feature automates compliance and accuracy for commodity hedges, providing treasury teams with real-time insights and streamlined regulatory reporting.