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Euronext details plans to meet new transparency rules in commodities
November 8, 2017 / 6:34 AM / 12 days ago

Euronext details plans to meet new transparency rules in commodities

PARIS (Reuters) - Euronext gave details on Wednesday of weekly commodities reports it will publish from next year to meet new European rules aimed at improving transparency in financial markets.

The trading exchange, whose derivative markets mainly include agricultural products, will from Jan. 3 publish weekly “commitments of traders ”(CoT) reports that will set out positions held by investors, in a similar way to those published by the U.S. Commodity Futures Trading Commission (CFTC).

Following the financial crisis in 2008-2009, when opaque trading led to disaster, European regulators have pushed to bring greater transparency to stock dealing and agreed on a set of rules gathered in the Markets in Financial Instruments Directive, or MiFID II.

CoT data gives investors a clearer picture of the market, providing information on what sort of participants have been buying and selling which products.

Euronext will release its report every Wednesday at around 1730 CET, gathering positions at the close of trading the previous Friday, it said.

The CFTC reports in the United States are published on Fridays based on data by the close of Tuesday.

Euronext operators will be divided into five categories defined by EU regulators: investment firms or credit institutions; investment funds; other financial institutions; commercial undertakings; and operators with compliance obligations under 2003/87/EC, which include operators with obligations to hold greenhouse gas emissions permits.

For each category, the exchange will publish the number of long and short positions, changes versus the previous week, percentages of the total open interest, and overall number of market participants holding a position.

“This report will provide additional information, which is a good thing for more transparency. We will be able to evaluate what is traded by industry players and what is not. We will be able to make comparisons,” Euronext Head of Commodities Olivier Raevel told Reuters.

There will be one report for each product, he said.

Alongside this, participants will be required to provide the relevant authorities, which include Euronext and the European Securities and Markets Authority (ESMA), with a breakdown of the positions held by all persons on the venue on a daily basis.

Euronext’s main commodities derivatives are its milling wheat <0#BL2:>, corn (maize) <0#EMA:> and rapeseed <0#COM:> contracts.

Its futures contracts for rapeseed meal, rapeseed oil, skimmed milk, unsalted lactic butter, sweet whey food grade powder, nitrogen fertilizer solution and wood pellets are little traded, or not at all.

Reporting by Valerie Parent; Writing by Sybille de La Hamaide; Editing by Mark Potter

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