Consultation opens
04/12/2023
Consultation closes
16/02/2024
16/02/2024
CP23/27: Reforming the commodity derivatives regulatory framework
Our consultation sets out our proposals concerning position limits, the exemptions from those limits, position management controls, the reporting regime and the ancillary activities test.
Why we are consulting
The commodity derivatives regulatory regime aims to mitigate the risk that large positions can cause disorderly pricing or settlement conditions. This can harm participants in financial markets, users of commodity markets and the real economy.
We propose to apply more stringent requirements to a narrower set of critical contracts. The proposed changes aim to deliver fair and proportionate regulation by removing requirements that impose unnecessary burdens on firms, while placing a sharper focus on the market activity that poses the greatest risk to the real economy.
Who this is for
- trading venues in the UK which admit to trading commodity derivatives
- persons, including commercial users and financial firms, who trade commodity derivatives in the UK
Next steps
This consultation has now closed. We will publish feedback on responses and issue a Policy Statement once we have reviewed your comments.
After considering feedback, we will make the necessary amendments to the FCA Handbook rules and guidance.
Background
This consultation is part of the Wholesale Markets Review (WMR), a review of the UK’s secondary markets framework, that we have been conducting with the Treasury. In line with our commitment in the WMR Consultation Response, we are amending our rules to ensure that they are proportionate to the benefits they deliver to market integrity.
The proposed regime builds on changes we have already made to strengthen commodity derivative markets and supports our aim to strengthen the UK’s position in global wholesale markets, a key priority in our 3-year strategy.