Brussels, 31/08/2010 (Agence Europe) - “I fully share the view of the French government on the importance of issue of markets in derivatives of raw materials and assimilated products, and the need for a coordinated European approach,” Internal Market Commissioner Michel Barnier told AFP on Tuesday 31 August 2010. He went on: “More particularly, at European level, the proposals on derivatives, including those related to raw materials, that I will bring forward in mid-September will bring greater transparency and discipline”. In a piece published by French press in mid-August, he stressed that, in order to tackle speculation, transactions in, especially agricultural, raw materials had to be regulated.
Following the comments of French President Nicolas Sarkozy, who wants the forthcoming French Presidency of the G20 to tackle raw material price volatility (see EUROPE 10201), the French authorities sent Brussels a full document arguing for a European legislative initiative in this area, supplemented with sectoral measures. European legislation would bring increased transparency, over certain players, such as specialist traders, impose position limits and ease the exchange of information between sectoral regulators and financial regulators. The whole range of derivatives of raw materials (oil, electricity, gas, metals, agricultural products) would be covered, along with CO2 allowance markets. Failing a legislative initiative, the European Commission could bring forward a communication setting out the principles informing regulation of derivatives of raw materials markets as part of a review of European law (for example, Directives 2003/6/EC on market abuse and 2004/39/EC on markets in financial instruments). Derivative financial products are instruments which protect holders against the risk of underlying assets (for example, loans, exchange rates, raw materials, etc). They may be misused for speculative purposes. (M.B./transl.rt)