FSA has published the second edition of its newsletter for commodity markets. This issue covers:  

  • Commission review of MiFID’s scope. CESR and CEBS advised the Commission a year ago to leave the boundaries of MiFID unchanged for commodity and exotic derivative business and suggested two possible appropriate prudential regimes. Since then, the expiry date for commodity derivatives firms exemptions from the CRD has been changed from 2010 to the end of 2014;  
  • US legislation. FSA noted proposals from the US Treasury to bring all major derivatives market participants within the scope of regulation;
  • OTC markets consultation. FSA notes its and Treasury’s response to this Commission consultation;
  • Engaging with G20 and IOSCO. The IOSCO Commodity Futures Task Force is to meet to discuss a G20 request to look at oil market regulation, specifically transparency. FSA co-chairs this task force;
  • Missing trader intra-community fraud. This fraud (carousel fraud) has threatened emissions market allowances trading, and Treasury has decided Carbon Credits will be zero-rated for VAT to address the risks;
  • FSA’s first market abuse commodities round table, in June, which helped firms understand when FSA expects STRs; and
  • How markets have coped with the financial crisis and the challenges and risks FSA sees the markets now face.