IOSCO Revises Commodity Derivatives Market Supervision Principles

IOSCO revised its 2011 "Principles for the Regulation and Supervision of the Commodity Derivatives Markets" to address market developments and recent commodity markets volatility.

IOSCO amended 24 principles primarily focused on price discovery and hedging functions of physical commodity derivatives markets and added a new principle to ensure market participants have a plan in place to address unexpected disruptions and maintain market integrity. In revising the principles, IOSCO cited a number of market developments, including the emergence of various trading venues, increased oil price reporting agencies, direct access for end-users, reliance on electronic data, the importance of sustainability factors for investors, the use of exchange-traded products and the impact of novel and unexpected market disruptions (e.g., COVID-19).

CFTC Commissioner Kristin N. Johnson expressed support for adopting the 2023 Principles, stating the revision will ensure the principles remain relevant to the changing needs of the commodity derivatives markets.