As 2018 draws to a close, it is worth briefly reflecting where we stand in the world of regulation, as applied to energy and commodity trading: We opened the year with this post, very shortly before MiFID II came into application, on 3rd January. The start of MiFID II was a busy time for many in the sector. However, news related to MiFID II reduced over the course of the year, latterly focused on changes to position limits.
The opening post predicted that the year would see a great deal of activity around “Consolidation, maturity, enforcement and surveillance”. This has certainly been the case. We are now firmly in the era of “making the rules work”. This manifests itself in several ways. We have seen proposed “tweaks” to some rules, such as EMIR, although the final form of the REFIT changes are still unknown. We have seen far more activity in anti abuse measures, spanning fines, announcements and also activity in matters such as the rolling out of surveillance technology. This focus on anti abuse measures certainly attracts a great deal of interest, with the most “hits” in terms of this blog. This shift in focus from “new rules” to more substantial updates on making the rules a reality has seen the shape of posts on this blog change, to less frequent, but more detailed updates.
In terms of news, the “Brexit” process has seen much movement this year. Unlike other rule changes, those arising from Brexit do not originate from a desire to achieve a sector specific regulatory goal. Rather, they are a side effect from a different process. Never the less, those affected (and there are many), need to prepare for what could take place on 29th March 2019, especially for the scenario of a “hard Brexit”. The difficulty in planning is that even with less than 100 days to go, we do not know which scenario to plan for. As a result, many are planning for the worst case, but risking “regret spend” in the process.
This blog will open in January with a post looking at the year ahead. In the meantime, thank you for reading so far, and wishing all warmest seasonal greetings and a Happy New Year!