See here for ISDA’s response to the consultation(here and here) on the upcoming Market Abuse Regulation, also known as “MAD II”. It is the latest set of rules that will apply to financial instruments  in order to reduce market abuse. Since MAR applies to financial instruments, the question of whether a commodities trade is in fact a financial instrument is very important to its applicability to the energy market.

In several parts of the response, ISDA stress the fact that the proposals could lead to double reporting, particularly in the case of the publication of inside information. They argue that REMIT already has adequate provision for this, and that increasing the requirement in MAR is unnecessary. Much of that part of the response starts around page 14, although it can be found in several other parts.

There are also separate arguments made against the mandating of automated surveillance systems. Given the current relativity low take up of such systems in the energy industry, such a mandate may lead to a great deal of work. That is not to say that considering such a system is not a good idea, but mandating one takes the issue to a whole new level.