US and EU regulators discussed reforms and toured CME

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The U.S. Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler and European Commissioner Michel Barnier met November 2nd, 2010 in Chicago Mercantile Exchange (CME). Top regulators met to discuss a range of issues concerning reforms for commodity markets, the regulation of over-the-counter (OTC) derivatives and the role of technology in the markets.

Chairman Gensler and Commissioner Barnier reaffirmed their commitment to strong regulation and enhanced transparency of the commodity markets. They also expressed general support for the IOSCO Task Force on Commodity Futures Markets and related efforts in the G20, which are working to improve the regulatory oversight and transparency of futures and physical commodity markets.

Commissioner Barnier and Chairman Gensler discussed position concentration in commodity markets and the role that position limits play in the oversight of physical commodity futures and swaps markets. They also discussed potential reforms to the Markets in Financial Instruments Directive and the Market Abuse Directive, which will assist in the overall efforts to reform commodity oversight in Europe.

They stressed the importance of ongoing efforts to reform the OTC derivatives markets reviewing four key objectives:

  1. clearing through central counterparties,
  2. trading on exchanges or electronic trading platforms, where appropriate,
  3. reporting and
  4. higher capital requirements for non-cleared swaps.

Finally, they noted the importance for regulators to take into account technological developments in the markets and consider the effects of high frequency trading.

Anna Timone (195 Posts)

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