| LAUSANNE, Switzerland, April 1
LAUSANNE, Switzerland, April 1 Trading house
Mercuria has began discussions with British regulators on
whether it should be the subject of regulatory oversight as it
is closing a deal to buy Wall Street bank JPMorgan's
commodities trading business.
The move, one of the first in the industry, highlights the
deep transformations through which trading houses are currently
going as after decades of little disclosure they begin to report
much more on who owns them, what they do and what they earn.
There is also an intense debate in the industry over how it
should be regulated amid questions from politicians whether some
merchants have become "too big to fail" and should be regulated
"It is early stages but as our business model changes we
need to actively analyse our role," Mercuria's head of
compliance Victoria Attwood Scott told Reuters on the sidelines
of the FT Commodities Summit.
Scott, who previously worked at Goldman Sachs, said
preliminary discussions were being held with Britain's Financial
Conduct Authority (FCA).
JPMorgan agreed to sell last month its physical commodities
business to Mercuria for $3.5 billion sweeping the fast-growing
Swiss trading house into the top league of commodities traders.
Mercuria's co-owner Marco Dunand said at the time the deal
placed Mercuria's model in between traditional merchants and the
banking trading model.
"What we don't want to do is to step in the regulatory
territory without regulatory authority. We need to understand
whether we might be subject to oversight. And we are open
minded," said Attwood Scott.
Dunand also said earlier on Tuesday discussions with
regulators were ongoing: "But you don't want to be regulated
like a bank ... we don't take deposits from customers," he said.
(Reporting by Dmitry Zhdannikov, editing by David Evans)