We have been offline for a couple of weeks and this post aims to catch up on some key news:
ACER published the first “reference price”, which will be a component in determining whether the Market Correction Mechanism (MCM) will be invoked when the rules start next week. The press release can be found here and the first reference price here. LNG price assessments started to be published the previous week (see here).
ACER also published the latest REMIT Quarterly newsletter which can be found here. It details recent developments in reporting, new documentation and REMIT fines.
The UK’s FCA has published this update relating to the application of the Ancillary Activity Test under MIFID II for UK firms. It extends the advice from last year, which, in the absence of a revised test, permits the use of old market data in the market size test or in some circumstances the use of the main business test only. It is expected that the legislation will soon be updated to move to a new test, as announced in December (see here).
IOSCO published an updated version of the “Principles for the Regulation and Supervision of Commodity Derivatives Markets” document, which can be found here. As reported in this press release by the CFTC, updates include:
- The role of price reporting agencies in price assessments, acknowledging the potential application of more recent work in oil markets to other commodity derivatives markets;
- The increased importance of high-quality data and information in price discovery and risk management;
- Dealing with unexpected disruptions in the market, pertinent to recent events including the COVID-19 pandemic and geopolitical events in Ukraine and elsewhere;
- Direct access to commodity derivatives markets by market participants;
- High-frequency and algorithmic trading; and
- Promotion of investor education
