November 25, 2024/IOSCO

IOSCO today published its Report – Targeted Implementation Review on Principles for the Regulation and Supervision of Commodity Derivatives Markets.

Recent commodity market volatility and the price spikes in energy and agricultural derivatives markets highlight the importance of a proper implementation of the IOSCO “Principles for the Regulation and Supervision of Commodity Derivatives Markets” (Principles) which objective is to ensure that the commodity derivatives markets serve their fundamental functions of facilitating price discovery and hedging, while remaining free from manipulation and abusive practices.

IOSCO conducted a targeted implementation review (the Review) of five Selected Principles, Principle 9, 12, 14, 15, and 16 that aim to address excessive commodity market volatility, over-the-counter (OTC) derivatives transparency and orderly functioning of the commodity derivatives markets. IOSCO views that an appropriate implementation of the Selected Principles would help mitigate the impact of external factors which may disrupt commodity markets, as recently experienced.

The Report sets out IOSCO’s recommendations to its members for improving the implementation of specific elements of the Selected Principles, as well as the intention to conduct further work in the OTC markets area.

Kevin Fine, Chair of the IOSCO Committee on Derivatives (Committee 7), said: “The need to enhance the resilience of the commodities market remains a priority for regulators globally. The recommendations included in this report can help IOSCO members to implement the Principles and enhance the resilience of their markets”