FCA proposes revised framework for commodity derivatives

On 4 December 2023, the FCA published a consultation on revising the commodity derivatives framework. CP 23/27 covers the regimes for position limits, position management controls, exemptions from position limits, and amendments to the ancillary activities exemption.

Changes to the regulatory framework were proposed in HM Treasury’s Wholesale Markets Review in 2021. Since then, a number of external events have informed the FCA’s thinking and related proposals.

Reforms to the commodity derivatives framework will affect several types of market participant, including trading venues, financial firms trading commodity derivatives and emission allowances, and non-financial firms who are active in those markets.

Download this Hot Topic to read our analysis of the FCA’s proposals.