On 6 May 2025, the European Securities and Markets Authority (ESMA) published its response to the European Commission’s (Commission) targeted consultation document on the functioning of commodity derivative markets.
Background
On 26 February 2025, the Commission published a targeted consultation document on the functioning of commodity derivatives markets. The consultation document also covered certain aspects relating to spot energy markets as a follow-up to some of the proposals made in the Draghi report for gas spot and derivative markets.
Response
In its response ESMA addresses the issues in the consultation document per ‘topic area’ covering:
- Data aspects.
- Ancillary activity exemption.
- Position management and position reporting.
- Position limits.
- C(6) carve out contracts.
- Circuit breakers.
ESMA also responds to certain elements of the Draghi report:
- Obligation to trade in the EU.
- Market correction mechanism and other dynamic caps.
- Application of organisational and operational requirements to the spot market.
- Enhanced supervisory cooperation in the energy area.