EU commodity position limits prove tricky to hammer out
EU regulators are working on plans to implement commodity derivatives position limits under Mifid II. But their latest proposals have been criticised by energy firms, which point to questions over issues such as hedging exemptions and where the limits should be set
Irrespective of whether financial trading helps oil the wheels of markets or contributes to oil's collapse, politicians on both sides of the Atlantic are eager to rein back speculation in commodity markets. And in both cases, that has led to proposals for position limits on commodity derivatives.
In the European Union, a new package of financial markets legislation named Mifid II entered into force on July 2 last year, including an updated directive and a regulation. Among other things, the
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