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ARTICLE · 03 JANUARY 2024

FCA Consults On UK Commodity Derivatives Regulatory Framework Reform

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On 4 December 2023, the Financial Conduct Authority (FCA) published a consultation paper (CP23/27) on reforming the UK commodity derivatives regulatory framework (Framework).

United KingdomFinance and Banking
Carolyn Jackson
Carolyn Jackson
Ciara McBrien
Ciara McBrien
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On 4 December 2023, the Financial Conduct Authority (FCA) published a consultation paper (CP23/27) on reforming the UK commodity derivatives regulatory framework (Framework). CP23/27 sets out the FCA's proposals regarding commodity derivatives, including position limits, the exemptions from those limits, position management controls, the reporting regime, and the ancillary activities test (AAT).

Background

The Framework aims to mitigate the risk that large positions in commodity derivatives can result in disorderly pricing and/or settlement conditions. The FCA is concerned that such disorder can harm participants in financial markets, users of commodity markets and the economy itself.

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