IOSCO Good Practices for Commodity Storage and Delivery Infrastructure
IOSCO published a report that sets out good or sound practices to assist relevant storage infrastructures and their oversight bodies to identify and address issues that could influence the pricing of commodity derivatives and in turn affect market integrity and efficiency. The practices are of relevance to commodity derivatives traded on regulated trading venues, although certain practices may also be applied to commodities that underlie over-the-counter (OTC) contracts.
IOSCO identifies a number of issues that may apply to storage infrastructures and sets forth a range of possible actions to mitigate them. The practices are intended to benefit the activities of market participants regarding:
- physical commodities, which are the tangible or cash market goods that underlie derivative contracts subject to financial regulation
- commodity derivatives, which are financial instruments whose price is derived from the underlying physical or cash market commodities
The overarching objective of the good or sound practices is to create a framework that motivates the market to adopt best practices and focus on self-correction, rather than to create a framework that prohibits certain behaviors. IOSCO advocates the adoption of these good or sound practices by all relevant storage infrastructures, their oversight bodies, and financial regulators in IOSCO member jurisdictions, as appropriate to their role and activities. The good or sound practices in this report can be broken up into three categories: preventative practices that seek to establish good governance and dispute resolution procedures; monitoring practices that seek to address issues as they arise to mitigate deleterious effects; punitive practices that address, through resolution, behaviors after the fact.
Related Links
Keywords: International, Securities, PMI, Commodity Derivatives, Storage Infrastructure, Trading Venues, OTS Derivatives, IOSCO
Previous Article
MAS Issues Consultation on Outsourcing by Banks and Merchant BanksRelated Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.
