Commodities Inventory Management

A major European exchange wanted to expand its offerings in the commodities space, in particular to eventually make the process for physical delivery simpler and more secure. As a first step towards delivering this vision, the exchange brought in Sinara to build a system for the digitisation of commodity ownership. This would allow silos to issue electronic certificates/warrants to the exchange’s member firms.

These documents represent warehouse or storage receipts and give evidence of a commodity product in storage. The system manages ownership and possession of such physical goods, facilitates the transfer of the title and holding of collateral, and enables asset finance, repos, securities lending agreements and other financial instruments. Using these electronic certificate or warrants helps increase efficiency, simplify operational processes, provide greater transparency, and give clear, enforceable title to goods held in storage.

The system also makes it easier for silos to issue, transfer and manage certificates and warrants, and ensure rent payments for stored goods are correctly administered. By enabling documentation such as quality analysis reports to be attached to each warrant, the system helps increase confidence in the transaction and the goods being delivered.

The project itself started with a basic specification outlining some of these goals and the overall vision. A lot of detail had to be worked out through discussions between Sinara and the client’s commodities team, major silos, market participants and other stakeholders. In parallel, Sinara rapidly developed a prototype application and proof-of-concept system that showcased real-time warrant creation and issuance.

The software was implemented in C# using ASP.NET MVC and SignalR, as well as HTML5, CSS, Typescript and a number of other open source and pre-built Sinara libraries. It was initially hosted upon Sinara’s own servers to make it easy to access for the exchange’s testers and other external parties. The team then worked closely with the client’s IT department to transfer the final system onto their own hosting environment.

Sinara continues to provide support and maintenance for the software under our advanced support process.