News
BackThe European Commission will probably present a draft proposal in the coming September, which will make derivatives trading subject to stricter regulations. In preparation for this, the Commission has now opened consultation proceedings, during the course of which the civil society will have its say. At the same time, the European Parliament decided a resolution, which contains a commitment to more transparency and stricter rules for the derivative market.
Due to excessive speculative trading, Credit Default Swaps (CDS) – so-called insurances against default – were recently caught in a crossfire of criticism. These papers, which were originally developed for minimising the risk, were increasingly more frequently bought and sold to bet on the reduction of the solvency of individual institutions. The European Parliament now wants to ban these speculative transactions with Credit Default Swaps. Apart from that, these credit insurances are to be handled by central clearinghouses. If the MEPs have their way, speculative trading with raw materials and agricultural products will also be banned.
Meanwhile, the Internal Market and Services Directorate General in the European Commission has begun a public consultation on the subject of Derivates and Market Infrastructures. Similar to the Parliament, the Commission intends to lower the risk factors in the derivatives trade by introducing clearinghouses throughout. From the point of view of the Chamber of Labour, this would be an essential step to guarantee safe trading. Apart from that, the Commission wants to make it compulsory that in future also derivates, which are traded “over the counter” (OTC) - sold publically - have to be registered. That way, the market should become more transparent.
Further Information:
Press release of the European Parliament
Consultation document of the Commission
Frequently Asked Questions on the Consultation
AK position paper on the Communication of the European Commission: Ensuring efficient, safe and sound derivatives markets (October 2009)
Meanwhile, the Internal Market and Services Directorate General in the European Commission has begun a public consultation on the subject of Derivates and Market Infrastructures. Similar to the Parliament, the Commission intends to lower the risk factors in the derivatives trade by introducing clearinghouses throughout. From the point of view of the Chamber of Labour, this would be an essential step to guarantee safe trading. Apart from that, the Commission wants to make it compulsory that in future also derivates, which are traded “over the counter” (OTC) - sold publically - have to be registered. That way, the market should become more transparent.
Further Information:
Press release of the European Parliament
Consultation document of the Commission
Frequently Asked Questions on the Consultation
AK position paper on the Communication of the European Commission: Ensuring efficient, safe and sound derivatives markets (October 2009)