FR06/2014 Update to Survey on the Principles for the Regulation and Supervision of Commodity Derivatives Markets

Update to Survey on the Principles for the Regulation and Supervision of Commodity Derivatives Markets Final Report The Board OF THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS FR06/2014 SEPTEMBER 2014 ii Copies of publications are available from: The International Organization of Securities Commissions website www.iosco.org © International Organization of Securities Commissions 2014. All rights reserved. Brief excerpts may be reproduced or translated provided the source is stated. iii Contents Chapter Page Abbreviations iv 1. Introduction 1 2. Overview of the 2012 Survey Results 1 3. 2014 Update 5 4. Next Steps 7 Annex A Summary of 2012 Gaps That Have Been Addressed 8 Annex B Summary of Updated Survey Results 10 iv ABBREVIATIONS Market Authorities  Argentina – ComisiÓn Nacional de Valores (CNV)  Australia – Australian Securities and Investment Commission (ASIC)  Brazil – Comissão de Valores Mobiliários (CVM)  Canada – Autorité des Marchés Financiers (AMF)  Canada – Alberta Securities Commission (ASC)  Canada – Ontario Securities Commission (OSC)  China – China Securities Regulatory Commission (CSRC)  Dubai – Dubai Financial Services Authority (DFSA)  Hong Kong – Securities and Futures Commission (SFC)  India – Forward Markets Commission (FMC)  Japan – Financial Services Agency (FSA Japan)  Japan – Ministry of Economy, Trade and Industry (METI)  Korea – Financial Services Commission & Financial Supervisory Service (FSC/FSS)  Malaysia – Securities Commission Malaysia (SC Malaysia)  Saudi Arabia – Capital Market Authority (CMA)  Singapore – Monetary Authority of Singapore (MAS)  South Africa – Financial Services Board (FSB)  Switzerland – Swiss Financial Market Supervisory Authority (FINMA)  United Arab Emirates – Securities and Commodity Authority (SCA)  United Kingdom – Financial Conduct Authority (FCA)  United States – Commodity Futures Trading Commission (CFTC) 1 1. Introduction At the G20 Summit in Cannes in November 2010, the G20 endorsed IOSCO’s final report on the Principles for the Regulation and Supervision of Commodity Derivatives Markets (Principles). In their declaration, the G20 stipulated that Market Authorities1 should be granted effective intervention powers to address disorderly markets and prevent market abuses. In particular, it was stated that Market Authorities should have the ability to use formal position management powers, including the power to set ex-ante position limits, particularly in the delivery month where appropriate. The G20 Leaders re-affirmed their commitment to enhance transparency and avoid abuse in commodity markets, including over-the-counter markets. In April 2012, IOSCO commissioned a survey as a means to carry out an implementation review of the Principles to be answered by its members. Answers were received from 37 Market Authorities. The survey review results were collated by the IOSCO Committee on Commodity Derivatives Markets (Committee 7) and reported in October 2012 in the Survey on the Principles for the Regulation and Supervision of Commodity Derivatives Markets (2012 report).2 Subsequently, the G20 Finance Ministers Summit declaration in Moscow in February 2013 and the G20 Leaders’ Summit declaration in St. Petersburg in September 2013, respectively, called for monitoring, on a regular basis, of the proper implementation of the Principles. The IOSCO Board Chair and the co-chairs of Committee 7 agreed to prepare an update report in time for the G20 Brisbane Summit in November 2014, including a reprise of the conclusions of the 2012 review, with particular focus on supervision and enforcement and those principles where members’ were yet to achieve full compliance. In order to carry this forward, on 27 June 2014, the co-chairs requested the 37 Market Authorities that submitted answers to the 2012 Report to update IOSCO as to their progress to full implementation of the Principles using a three-question survey. The questions provided a mechanism for the Market Authorities to set out current and future regulatory developments since the 2012 Report toward progress against the Principles.3 2. Overview of the 2012 Survey Results The results of the 2012 Report showed that the majority of respondents were broadly compliant with the Principles. The following summary from that Report focuses on the regulatory areas that most directly respond to concerns articulated by the G20 in its prior Communiqués: Principles for Transparency 1 A Market Authority is a governmental regulator, a self-regulatory organization or a regulated market. 2 Attached as Annex “A.” 3 Attached as Annex “B.” 2  Principle 6: Transparency - Th