On January 16, the Autorité des Marchés Financiers (AMF)1 announced it has extended to OTC markets the obligation to submit a declaration of transactions. The decision is retroactive to January 1, 2012.
The measure follows up on the priorities set by the G20 in 2011 and fulfills the wishes of the European Securities and Markets Authority (ESMA). France thus joins the eleven European countries2 that anticipated the European directive scheduled for 2013.
Yet, unfortunately, the AMF decision does not apply for agricultural products, for which over 80 percent of the transactions are conducted on the OTC markets, thus demonstrating their increased financialization. At the height of the 2008 financial crisis, 90 percent of agricultural transactions did not generate physical settlements and could therefore be considered as pure speculative operations.
This announcement represents a necessary but by no means sufficient condition to regulate agricultural commodity prices. It could even make the products that are not concerned by the measure, especially the agricultural products, more attractive to speculators, leading to an increased volatility on these markets.
Additional and broader measures must thus be implemented, at the European as well as international levels, as we pointed out in an article presenting the measures advocated by momagri to curb the adverse consequences of financial speculation 3.
1 The body in charge of improving the efficiency of France’s financial regulatory system.
2 Austria, Denmark, Estonia, Spain, Finland, the United Kingdom, Hungary, Ireland, Sweden, as well as Iceland and Norway that are not members of the EU.
3 Please see momagri’s ten proposals to regulate speculation on agricultural commodity markets at: http://www.momagri.org/UK/points-of-view/momagri-s-ten-proposals-to-regulate-speculation-on-agricultural-commodity-markets_948.html