Objection to Commodity Derivative Position Limits

Summary

The European Parliament is challenging a new EU regulation on commodity derivatives, arguing that its rules for limiting market speculation are too weak and fail to protect food prices.
10 15.02.2017
Other
economy
finance
social policy
administrative law
business and competition

Key points

  • The European Parliament objects to the Commission's proposed rules for setting position limits on commodity derivatives.
  • The proposed EU methodology is significantly more permissive than the position limit regime used in the United States.
  • Excessive speculation in commodity markets can lead to wild price swings, causing hardship for agricultural producers and consumers.
  • The baseline limit of 20% for sensitive food contracts is considered insufficient to prevent market abuse.
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