IOSCO and commodity markets Ministers of Agriculture Third Deputies meeting 12 May 2011 Paris Edouard Vieillefond Managing Director AMF

2 Who is IOSCO? International Organisation of Securities Commissions The international standard-setter for financial markets; the primary international cooperative forum for securities market regulators Founded in 1984; now over 100 member agencies who regulate more than 95% of the world’s financial markets Missions and objectives: -Cooperate in developing, implementing and promoting adherence to internationally recognised standards of regulation, oversight and enforcement -Protect investors; maintain fair, efficient and transparent markets; seek to address systemic risks

3 What does IOSCO recommend for commodity markets? Among the most important published recommendations to date, with respect to all commodity markets including agricultural markets: Financial regulators should ensure that they have the powers and resources necessary to detect, investigate and prosecute manipulation Financial regulators should require the reporting of large trader positions for the relevant on-exchange contracts and publish aggregate data on these positions It is crucial to improve the transparency of both market fundamentals (supply, demand, inventories…) and physical commodity market transactions

4 What aspects of commodities markets is IOSCO looking at now? As requested by the Seoul G20, for delivery at the October G20 Finance Ministers meeting Review and update the Tokyo Communiqué on Supervision of Commodity Futures Markets (1997) that applies to all commodity markets: futures contract design, access to and analysis of market information, market intervention powers etc. In particular: 1.“settlement procedures should reflect the underlying cash market and promote reliable pricing relationships and price convergence” 2.“market authorities should have the power to set ex ante position limits where appropriate, and to impose price movement limits for given time periods (e.g. intra-day)” 3.“publication of the aggregate exposures of…commercial users versus non-commercial traders should be considered a direct obligation” Analyse the role and impact of oil price reporting agencies (joint report by IOSCO, OPEP, IEA and IEF) Advise ISDA on the creation of trade repositories for OTC commodity derivatives: RFP focusing on financial oil contracts closed 25 April, results to be announced by end of May

5 What is IOSCO’s future work plan in this area? Possible future work streams include: 1.A comparative analysis of the scope of financial regulation in the commodities markets (regulated actors and products) 1.A comparative analysis of market abuse frameworks and experiences in the main jurisdictions 1.Development of detailed recommendations on large trader reporting requirements, approaches to position management (including position limits) and market surveillance practices