The European Commission is launching a consultation to comprehensively assess the current regulatory landscape of commodity derivatives, emission allowances markets, as well as certain aspects of spot energy markets, to ensure they continue to serve their critical function in the EU economy effectively. The feedback collected will feed into a report by the Commission to the European Parliament and the Council, as required by the Markets in Financial Instruments Directive (MiFID), which will ultimately guide potential future policy initiatives in this area. The consultation is particularly timely considering the recent energy crisis, which highlighted the need for a deeper evaluation of existing rules and their effectiveness in promoting these markets and ensuring their optimal functioning. In his report on competitiveness, Mario Draghi also included a significant number of recommendations linked to the functioning of energy spot and derivatives markets.
Commodity derivatives are key instruments for market participants to hedge their exposures in the underlying commodity markets (energy, agricultural commodities, metals, etc.). The proper functioning of commodity derivatives markets plays an important role for the stability and prosperity of the EU economy and, as regards energy derivatives markets, for the affordability of energy in the EU and the efficient functioning of the market. Markets for commodity derivatives in the EU are subject to an extensive set of rules that cater for the specific nature and relevance of those instruments to the EU economy.
This initiative aims to collect feedback from stakeholders, which will inform our efforts to enhance the efficiency and resilience of EU commodity derivatives markets, as well as certain aspects of spot energy markets. When it comes to commodity derivatives, it is important to note that this consultation covers all types of commodities, and is not limited to energy derivatives. Our ultimate objective is to ensure these markets continue to support industry and mitigate risks, while simultaneously exploring opportunities to reduce regulatory burdens on EU companies where feasible.
The consultation is open until 23 April 2025.
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Details
- Publication date
- 26 February 2025
- Author
- Directorate-General for Financial Stability, Financial Services and Capital Markets Union