IOSCO: commodities delivery and derivatives pricing

Lug 15 2018

The Board of the International Organization of Securities Commissions (IOSCO) is requesting feedback on proposed good or sound practices to assist relevant storage infrastructures and their oversight bodies to identify and address issues that could affect commodity derivatives’ pricing and in turn affect market integrity and efficiency.

In the report “Commodity Storage and Delivery Infrastructures: Good or Sound Practices, published for consultation today”, IOSCO proposes the adoption of the good or sound practices by all relevant storage infrastructures, their oversight bodies and financial regulators in IOSCO member jurisdictions, as appropriate to their role and activities.

IOSCO believes that the implementation of these practices will lead to a more transparent and robust environment for the physical storage and delivery of commodities, producing benefits for all commodity market participants.

The overarching objective of the good or sound practices is to create a framework that incentivises the market to adopt best practices and self-correction, rather than one that prohibits certain behaviours.

The report builds on IOSCO ́s 2016 report “The Impact of Storage and Delivery Infrastructure on Derivatives Market Pricing”, which identified certain commodities storage and delivery situations that have the potential to affect derivatives pricing if not properly addressed. These practices fall into five broad areas: oversight, transparency, conflicts of interest, fees and incentives, and operations.


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