Thursday December 1 2016

News Source: Global Exchanges

Focus: Trading Rules

Type: General




The European Commission has taken steps today to strengthen the regulation of commodities markets and curb price speculation. The measures also aim to ensure that firms active on these markets are regulated appropriately.
The package completes the rulebook of secondary measures under the revised Markets in Financial Instruments Directive (MIFID II), and gives market participants time to prepare for its application on 3rd January 2018.
In particular, the Commission is adopting regulatory standards that will define parameters for competent authorities to determine “position limits”, i.e. the maximum amount of commodity derivatives that can be held by a single trader, and which represent a tool to help to limit commodity speculation, support orderly pricing and prevent market abuse. The new rules also ensure that large non-financial firms trading a large amount of commodity derivatives are regulated under MiFID II (through the so called “ancillary activity test”).
The package consists of two Delegated Regulations that are part of the MiFID II rulebook and are based on the draft regulatory technical standards of the European Securities and Markets Authority (ESMA). The Commission modified key aspects of the original proposal by ESMA in order to provide for stricter position limit standards whilst at the same time seeking to avoid the risk of unintended consequences for the real economy and end users.
With today`s adoption the Commission has put in place the two final pieces of the 28 regulatory standards that ensure the application of MiFID II on 3rd January 2018.
The Council and the European Parliament now have three months to approve or object to the two standards.
Click on the above link for further details.