EC Considers Update to EMIR for Commodity Firms

EU policymakers are considering extending bank rules to commodity firms to prevent a repeat of collateral payment issues seen after the gas price surge according to a document seen by Reuters

• Waivers for big commodity firms from rules that govern banks could be scrapped after utilities and traders were struggling to meet margin call requirements earlier this year.
• The European Commission is expected to set out proposals next month to update EMIR looking for medium-term "structural solutions".
• "Recent events in commodity markets have highlighted targeted areas where there may be merits in improving the EMIR framework," according to the European Commission informal document on Tuesday.
• Proposals include clearing houses having separate accounts for financial and non-financial customers and a requirement for separate default fund for their commodities business.
• Also improved position reporting to regulators, and tougher joining criteria for commodity firms could be included.