EU targets commodity speculation

Marion Dakers
EUROPEAN markets supremo Michel Barnier yesterday said he was prepared to crack down on speculation in the commodities market, as he called for greater transparency in bond and derivatives trading, and dark pools.

He used his speech on reform of the EU’s Markets in Financial Information Directive (MiFID) rules to announce plans to examine pre-trade transparency.

“The revision of MiFID is one of the key elements of an ambitious reform of the raw materials markets,” the EU’s financial markets chief said, stressing that commodity market regulation was high on his agenda.

He added: “The revision of MiFID will not leave the questions which were brutally asked by the crisis without answers.”

MiFID was introduced in 2007 and unleashed fierce competition, resulting in cheaper trading, smaller order sizes, hammered margins, fragmented share prices and upstarts winning chunks of business from traditional exchanges.

He said the EU’s plans for a bloc-wide financial regulator alongside new MiFID rules will aid transparency in all trading markets, and warned: “We are ready to go further. This is a key issue. We will not hesitate to consider further measures.”

EU agriculture minister Dacian Ciolos also laid into the futures markets at the same conference.

“We need to go further, especially today on the issue of position limits to counter excessive movements,” he said in his speech.

He added: “The role of futures market is not to feed speculation and some actors’ profits. The role of futures markets is to offer tools to anticipate, manage volatility and contribute to the matching of supply and demand.”