The Technical Committee of the International Organization of Securities Commissions (IOSCO) has published its Task Force on Commodity Futures Markets – Report to the Financial Stability Board (Report), which outlines current work on the supervision of commodity derivative markets, market transparency, and the ongoing monitoring of developments in OTC financial oil markets.
Custodians of physical commodities will be able to see the response to the G20s request in Seoul, November 2010, for an update to be provided to the Financial Stability Board on IOSCOs workstreams in support of the G20s aim of improving the regulation and supervision of exchange-traded, OTC derivative and physical commodity markets. It also outlines IOSCOs future plans and possible additional new areas of focus.
“IOSCO believes that its work to date on the review of the Tokyo Communiqu, price reporting agencies and the creation of a trade repository, demonstrates significant progress in advancing its mandate and responding to the G20s requests on commodity derivatives and related physical markets,” says Hans Hoogervorst, Chairman of IOSCOs Technical Committee. “We remain focused on our goal of working to enhance supervisory best practice, improve transparency and support improved functioning in exchange-traded, OTC derivative and physical commodity markets.”
“IOSCO is also considering placing its work on commodities markets on a more permanent basis within the organisation. This expanded focus will include making new recommendations for further work which is likely to lead to proposals to improve market transparency, oversight and anti-market abuse treatment for these commodities markets, where necessary,” he adds.
The Task Force is undertaking work to update the content of the Communiqu in light of market developments since 1997, which will include recommendations on market surveillance, information sharing, market transparency and the design of commodity futures contracts which are intended to ensure the overall orderly and efficient functioning of derivative markets where the underlying is a physical commodity.
The intention of the Task Force is to finalise and submit a full set of recommendations in time for the G20s October 2011 Finance Ministers meeting.
Meanwhile, commodity market regulation and supervisory changes are causing concern for market participants.
Click here to view the latest interview with Ben Blackett-Ord, CEO at financial services regulatory consultancy Bovill, on his thoughts and how entities could overcome foreseeable challenges from MiFID II and issues that that still surround the commodities market.