On 24 May 2019, the European Securities and Markets Authority (ESMA) published a call for evidence on position limits and position management in commodity derivatives.
Under Article 90(1) of MiFID II, “Before 3 March 2020, the European Commission shall, after consulting ESMA, present a report to the European Parliament and the Council on…the impact of the application of position limits and position management on liquidity, market abuse and orderly pricing and settlement conditions in commodity derivatives markets.” ESMA’s call for evidence is the first step in fulfilling the Commission’s mandate.
The call for evidence seeks the views of stakeholders on the impact of position limits and position management controls in commodity derivatives markets. Section 3 of the call for evidence provides a summary of the position limit regime under MiFID II and seeks views on the potential impact of position limits on liquidity, market abuse and orderly pricing and settlement conditions in commodity derivatives markets. Section 4 discusses the impact of position management controls on commodity derivatives markets. Section 5 looks forward at potential improvements to the existing framework.
The deadline for responses to the call for evidence is 5 July 2019. ESMA will be delivering its final advice for the Commission’s report on the impact of position limits and position management on commodity derivatives markets by 31 March 2020.