SOURCE: Actimize, Inc.

Actimize, Inc.

September 28, 2010 07:00 ET

Energy Trading Compliance Research by NICE Actimize and Fulbright & Jaworski Finds Industry Aware of, Yet Not Fully Prepared for, New Regulations

NEW YORK, NY and HOUSTON, TX--(Marketwire - September 28, 2010) -

Responses from more than 140 energy trading representatives worldwide highlight:

  • Nearly 80% believe regulatory audit and enforcement actions will increase
  • Only 14% believe the industry's readiness to comply is 'good' or 'excellent'

Facing increased scrutiny from regulators, energy trading companies acknowledge the many risks entailed in failing to establish effective compliance programs, but are currently challenged by compliance costs and shifting enforcement priorities, according to a newly released survey by compliance software provider NICE Actimize, a NICE Systems Company, and international law firm Fulbright & Jaworski L.L.P.

Of the energy trading representatives polled in the study, none believed that audit and enforcement actions taken against energy trading firms will decrease. Yet in the face of increased scrutiny from regulators, more than one-quarter of the respondents believe their organizations are not devoting sufficient staff and resources to compliance priorities.

"Similar to the risk management arena a decade ago, the energy industry is becoming convinced that the failure to implement effective controls could lead to significant risks, regulatory enforcement, potential penalties and reputational harm," said Jim Heinzman, managing director of trading markets at NICE Actimize. "The research indicates that the industry recognizes the risk and harm associated with not investing in compliance, yet most organizations are not currently using systematic compliance programs but rather manual or first generation systems for compliance analysis."

"We are at an inflection point in the energy trading industry," said Erik J.A. Swenson, a partner at Fulbright & Jaworski. "The regulatory requirements and oversight expectations have increased, but the industry is challenged with how to respond to the evolving expectations. We expect firms to continue to adapt to this new regime by implementing new programs in the next 12 to 24 months as the regulatory front continues to evolve."

Increasing Need for Improved Compliance

The research indicates that many in the energy trading industry recognize that regulators are increasing their enforcement activity, resources and infrastructure. Approximately 80 percent of respondents believe regulatory audit and enforcement actions against energy trading firms will increase. Almost 40 percent of respondents believe regulators already have the capability to examine energy trading activity, while others believe regulators will increase surveillance capabilities in the coming years. Accordingly, improved compliance programs and infrastructure, including the use of automated surveillance, may become a significant industry need.

Most Aware of the Rules, But Not Fully Prepared to Comply

There is an apparent gap between how respondents perceive their own compliance capabilities versus those of the industry as a whole. Only 14 percent of respondents rate the energy trading industry's readiness to comply with new energy trading regulations as 'good' or 'excellent,' yet nearly two-thirds of respondents felt that their own firms' internal compliance and control systems were capable of meeting new requirements. Less than half of respondents indicated they currently have an oversight system in place that monitors for suspicious activity on a daily or intraday basis. Collectively, this data suggests a disconnect between the industry's understanding of, and execution against, current and proposed regulations which require daily, and in some instances, intraday, monitoring.

Research Background

This study was sponsored by NICE Actimize and Fulbright & Jaworski. Infosurv, an independent research firm, conducted the study late in the second quarter of 2010. The research participants -- 142 energy trading company representatives from around the globe -- completed an online questionnaire that consisted of more than 30 questions.

To access the full report, go to:

About NICE Actimize

NICE Actimize, a NICE Systems company, is the world's largest and broadest financial crime, risk and compliance solutions provider. The company provides real-time and cross-channel fraud prevention, anti-money laundering, enterprise investigations, risk management and trading surveillance solutions built upon a single flexible software platform. Implemented by the majority of the world's largest financial institutions, including all of the top 10 banks, the company's solutions enable clients to mitigate financial crime risk, improve compliance, and reduce operational costs.

About NICE Systems

NICE Systems is the worldwide leader of intent-based solutions that capture and analyze interactions and transactions, realize intent, and extract and leverage insights to deliver impact in real time. Driven by cross-channel and multi-sensor analytics, NICE solutions enable organizations to improve business performance, increase operational efficiency, prevent financial crime, ensure compliance, and enhance safety and security. NICE serves over 25,000 organizations in the enterprise and security sectors, representing a variety of sizes and industries in more than 150 countries, and including over 80 of the Fortune 100 companies.

About Fulbright & Jaworski L.L.P.

Fulbright & Jaworski, founded in 1919, is recognized as one of the leading oil & gas law firms in the U.S. by Chambers USA 2010. This is due in part to the fact that six of our energy regulatory lawyers were recognized individually by Chambers. Our energy regulatory group is composed of highly experienced lawyers who provide a full range of services in energy regulatory matters, including natural gas regulation, crude oil and petroleum product regulation, and electric power regulation. This team includes seasoned lawyers formerly with the CFTC, the FERC, the U.S. Department of the Interior, and the U.S. Department of Justice, as well as a former general counsel of a major energy company. We have a broad regulatory practice geared to helping our energy clients cope with the complex and changing regulatory schemes affecting their business operations, including the trading of energy commodities.

Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE Systems. All other marks are trademarks of their respective owners. For a full list of NICE Systems' marks,

Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including the statements by Mr. Heinzman, are based on the current expectations of the management of NICE-Systems Ltd. (the Company) only, and are subject to a number of risks and uncertainties that could cause the actual results or performance of the Company to differ materially from those described herein, including but not limited to the impact of the global economic environment on the Company's customer base (particularly financial services firms) and the resulting uncertainties; changes in technology and market requirements; decline in demand for the Company's products; inability to timely develop and introduce new technologies, products and applications; difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel; loss of market share; pressure on pricing resulting from competition; and inability to maintain certain marketing and distribution arrangements. For a more detailed description of the risk factors and uncertainties affecting the company, refer to the Company's reports filed from time to time with the Securities and Exchange Commission, including the Company's Annual Report on Form 20-F. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company undertakes no obligation to update or revise them, except as required by law.

Contact Information

  • Press Contacts:
    Rhiannon Staples
    NICE Actimize
    Email Contact

    Darrin Schlegel
    Fulbright & Jaworski L.L.P.
    Media Relations Director
    Email Contact