Europe gives commodity dealers a pass until 2020
European policymakers have given non-bank commodity dealers another three years before they become subject to certain provisions of the Capital Requirements Regulation. Members of Parliament and representatives of the EU member states have agreed to extend the exemption, currently set to expire at the end of 2017, so that they have more time to write regulations that apply specifically to this category of market participant. A key committee in the European Parliament gave its approval on March 7, and on March 23, the European Council, which represents the 28 Member States of the EU, approved the text of a proposed regulation extending the exemption to Dec. 31, 2020.
The Council noted that a comprehensive review of the prudential regulation of commodity dealers is now under way, and said the exemption makes sense while this review is ongoing. “Applying large exposure requirements and own funds requirements to commodity dealers should not come as the result of a lapsed exemption…but on the basis of a thoroughly reasoned decision,” the Council said.
