The ESMA should amend its motion on commodity derivatives


Brussels, 19 March 2015 – The European Union’s new rules to stamp out excessive speculation in commodity derivatives may fail to hit their target if a weak motion for technical standards by the European Securities and Markets Association (ESMA) is implemented.

MEPs will have an opportunity to challenge the Commission and ESMA on their Level II MiFID work so far at a meeting on Tuesday 24 March.

Joost Mulder, Head of Public Affairs at Finance Watch, said:

“We urge ESMA to dismiss industry calls for very generous limits on the amount of speculative trading allowed on commodity derivative markets.

“Unless ESMA tightens the limits and applies them to all firms on commodity markets including non-financial corporates, there is a significant danger that the EU’s new position limits regime will not achieve what lawmakers intended when they agreed the Level 1 text in January 2014.”

In early 2014, EU legislators agreed on a law (MiFID II) which includes a limit on speculative trading in agricultural and other commodity derivatives, in order to reduce excessive price volatility which harms users and producers of everyday foodstuffs and essential materials.  As part of the ongoing “Level 2” implementation of these rules, ESMA is now preparing the final technical standards for adoption by the European Commission in June.


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