Response to the ESMA Consultation Paper on Technical Standards for Commodity Derivatives

FESE supports the majority of the proposals included in the draft ESMA Technical Standards for commodity derivatives. We disagree, however, with the suggested methodology for determining the baseline figure for spot month limits, instead favouring the continuance of the current regime.

Furthermore, we would caution ESMA against stipulating a highly prescriptive process for position management controls which reserves little room for trading venues’ discretion. To function properly, position management controls need to be cautiously calibrated and tailored to the circumstances of each individual exchange, such as the nature of its membership and the characteristics and underlying markets of contracts it admits to trading.