EEX Group response to Public consultation on the review of the MiFID II / MiFIR regulatory framework

    EEX responded to the European Commission’s consultation on the review of the MiFID II / MiFIR regulatory framework.

    EEX Group particularly welcomes the recognition of the position limits and pre-trade transparency regimes for commodity derivatives markets as priorities in this review exercise. Their implementation and compliance has proven to be a burdensome and costly process for market participants and market venues.

    Where the position limits regime has worked mostly well for mature benchmark contracts, it has introduced severs adverse effects on the development of new and nascent contracts, as on the potential development of contracts into European benchmark contracts. Therefore, we suggest a refocus of the position limits regime on highly liquid “critical” contracts only. Such a scope ensures the legislative objectives are met and will mitigate the current unintended consequences on the development of commodity derivative contracts. The pre-trade transparency regime on its side could merit a more tailor-made approach to commodity markets. These changes would lead to more volumes being traded on the exchanges, contributing to a more transparent trading environment necessary for a cost-efficient energy transition and economic recovery process.

    A robust, crisis-proof trading system, combined with sound policies to ensure a fair and orderly market, is essential under any market circumstances but especially in the current crisis and future sustainable recovery.  Therefore, we recommend the European Commission and co-legislators to go forward with the review including our markets as priority area.