The European Securities and Markets Authority (ESMA) issued a consultation paper today on its rules setting position limits in the commodity derivatives markets.
These measures were introduced in an effort to improve the regulation, functioning and transparency of derivative markets in the wake of the 2008 crisis as part of its reforms known as MiFID II.
Now, the ESMA is reviewing the impact of those reforms on market liquidity, abusive trading, pricing and settlement in commodity derivative markets.
The paper also contemplates changes to restrict the derivatives that are subject to position limits to key contracts, introducing an exemption for financial counterparties, and improving the harmonization of these regimes by trading venues.
The ESMA aims to decide on possible rule changes in this area by March 31, 2020. The deadline for feedback on today’s consultation paper is Jan. 8, 2020.