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The PRA Principles are designed to: 1. Minimize the vulnerability of the assessment process to factors that could undermine the reliability of a PRA assessment as an indicator of physical oil market values or increase the susceptibility of an oil derivatives contract to manipulation or price distortion. 2. Facilitate a market authority’s determination as to whether a PRA-assessed price that is referenced by the terms of an oil derivatives contract accurately reflects the transactions in the physical oil market that it purports to measure, the data are sufficient to represent that physical oil market and such data are bona fide. 3. Facilitate a market authority’s ability to detect, deter and if necessary take enforcement action with respect to manipulation or other abusive conduct. The PRA principles also establish a benchmark against which market authorities can determine whether a PRA assessed price referenced or proposed to be referenced in an oil derivatives contract has been constructed under procedures that reflect the PRA principles. A negative determination makes it likely that a market authority would conclude that the assessed price was constructed through processes that undermine the reliability of that price as an indicator of physical market values. It is important to understand that these principles recognize that there is no requirement on any physical market oil participant to submit transaction data to PRAs. Because data are submitted on a voluntary basis, precipitous regulation of PRAs or requirements that oil market participants who submit data to PRAs submit all of their transaction data potentially could result in some oil market participants to decrease or even cease their submission of data to PRAs. IOSCO’s approach has therefore focused on creating incentives for PRAs to institute processes that IOSCO believes will enhance reliability of assessments that are indicators of the values in the physical oil underlying a derivatives contract.