On Friday 19 March, the European Securities and Markets Authority (ESMA) clarified its supervisory approach to position limits for derivatives contracts, expecting that the adjustment to the Markets in Financial Instruments (MiFID II) Directive, proposed by the Commission to support the post-Covid-19 economic recovery (see EUROPE 12535/11), will be effective in early 2022.
In line with the agreement reached between the Council of the EU and the European Parliament in December (see EUROPE 12619/9), position limits will continue to apply only to agricultural commodities derivatives and critical or significant commodity derivatives.
In the European Parliament, the S&D, Greens/EFA and The Left strongly opposed this change as they felt that the Commission was using the Covid-19 crisis as an excuse to deregulate the financial markets (see EUROPE 12608/9).
In its statement, ESMA says it is aware that the position limits, which the co-legislators have decided to abolish to promote economic recovery, may restrict the development of commodity derivatives markets in the EU.
However, until the legislative change becomes effective, ESMA cannot leave the law unimplemented, it stresses.
To coordinate supervisory actions, it asks national authorities to “not prioritise” supervisory actions concerning derivatives affected by the future legislative change.
Read the statement: https://bit.ly/3vJbYly (Original version in French by Marion Fontana)