Argus Responds to European Commission Consultation on OTC Derivative Market Regulation
LONDON, Aug. 30 /PRNewswire/ -- Argus today issued its response to the European Commission's consultation on over-the-counter (OTC) derivatives market regulation.
Argus noted that OTC commodity derivatives, especially energy derivatives, are inherently more robust than financial derivatives. They are underwritten by the physical asset and are therefore not subject to the same degree of systemic risk as purely financially based derivatives.
Argus advised the commission that regulators should take care, if setting up any new boundaries for OTC energy derivative trade, to ensure that:
Mandatory clearing does not damage energy market liquidity
Any requirements for a central data repository should not adversely impact the transparency that already exists for energy price assessments that are used for the financial settlement of derivatives
Any action does not reduce the currently high level of energy market transparency
Regulatory intervention should not damage price reporting agencies that provide transparency for energy markets
"We welcome measures to protect the consumer and deter market manipulation and other unfair business practices. Intelligent and sensitive regulation can play an important role in encouraging efficient markets, but it is vital to ensure that this is effective, appropriate and enforceable and does not undermine what it is designed to protect. Argus will continue contributing to this industry debate and our compliance team will work with regulators to ensure the best possible outcome," Argus Media chairman and chief executive Adrian Binks said.
Argus Media is a leading provider of price assessments, business intelligence and market data on the global coal, electricity, oil, gas, emissions and transportation industries. It is headquartered in London and has offices in Houston, New York, Washington, Dubai, Singapore, Tokyo, Beijing, Sydney, Moscow, Astana, Kiev and other key centers of the energy industry. Argus was founded in 1970 and is a privately held UK-registered company. Learn more at www.argusmedia.com.
