By Huw Jones
LONDON – The suspension of nickel buying and selling in London and Stockholm’s flash crash in shares present the necessity to enhance information on derivatives and evaluation non permanent halts to buying and selling, the European Union’s markets watchdog stated on Wednesday.
Verena Ross, chair of the European Securities and Markets Authority (ESMA), stated the halt in nickel buying and selling on the London Steel Change (LME) in March after the steel jumped to document highs confirmed how market volatility can flip right into a problem for buying and selling venues.
Piecing collectively a full image of positions in commodities has proved tough, trade officers have stated.
“Latest occasions in commodity markets are main us to replicate fastidiously on the extra instruments that may very well be put in place to raised establish potential dangers to orderly markets,” Ross instructed an occasion held by the Federation of European Securities Exchanges.
Ross stated that ESMA was taking a look at find out how to enhance transparency in commodity markets, equivalent to by means of extra info on over-the-counter positions held by market individuals.
On the flash crash in Sweden final month after a single promote order commerce by Citigroup, Ross stated it was one other instance highlighting the central position of so-called circuit breaker halts in buying and selling after excessive strikes.
Halts in particular person shares reached document ranges throughout an excessive bout of volatility in markets when economies entered coronavirus lockdowns in March 2020, she stated.
There have been additionally a number of halts on the finish of February and early March this 12 months when Russia started its invasion of Ukraine, she added.
“A dialogue on the design of circuit breakers would possibly properly be warranted,” Ross stated, including that outages and flash crashes might be detrimental to markets and harm their reputations.
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