EU Mulls Impact Of Commodity Derivative Limits On Liquidity

Law360, London (November 6, 2019, 4:21 PM GMT) -- Europe’s markets watchdog has launched a probe into whether caps placed on the amount of commodity derivatives a trader can hold is affecting the sector's liquidity under the bloc’s securities rulebook.

The European Securities and Markets Authority’s probe will also look at the effect of the caps on pricing and on prevention of market abuse, as it examines whether the move is damaging the European Union's commodity derivatives sector.

ESMA said it will review whether position limits under the updated Markets in Financial Instruments Directive are damaging or helping the market. The consultation will include a review of how the caps...

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