Reuters: Regulatory News: REFILE-European Commission seeks early 2014 vote on benchmarks law

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REFILE-European Commission seeks early 2014 vote on benchmarks law Aug 6th 2013, 16:15 Tue Aug 6, 2013 12:15pm EDT * European elections narrow window for decision-making * Analysts say process could drag on to 2015 BRUSSELS, Aug 6 (Reuters) - The European Commission aims to propose draft legislation in September to strengthen regulation of financial and commodity benchmarks in hopes of winning parliamentary agreement early next year and avoiding possible delay until 2015. The proposals follow an investigation into the role of commodity price reporting agencies, notably in oil, and scandals involving the manipulation of bank interest rate benchmarks. If they are endorsed in a plenary session of the European Parliament before the spring, the process can then be continued by the bloc's member states and the Commission. But any EU law not endorsed in the first months of 2014 would almost certainly have to wait until 2015 when a new set of EU officials will have taken office following European Parliamentary elections in May, 2014. A further complication is that the mandate of the European Commissioners will also expire at the end of October, 2014. "The plan remains to make a proposal in September and reach first reading agreement during this mandate, which expires next spring. It's ambitious but possible," a spokeswoman for the Commission, the European Union's executive, said on Tuesday. Some analysts say it will be impossible to agree the law before 2015 in view of the complexity and political sensitivity of the proposed rules to regulate markets. Diego Valiante, a research fellow at Brussels-based thinktank the Centre for European Policy Studies, said a leaked draft of the proposals went too far in attempting to regulate end-users. Also, their impact would extend beyond the European Union, meaning debate could be heated and involve other nations. "The proposal goes well beyond a light-touch approach and among other things can create significant extra-territorial effects, especially for commodities price assessments, when it comes to regulating users of benchmarks," he said. Price reporting agencies Argus Media and Platts, whose daily commodities price assessments are used as benchmarks to settle physical and derivative deals worth billions, have argued strenuously against the proposed new EU rules. They say they are very different from the interest rates market and should be exempt from external oversight. The European Commission said in May it was investigating major oil companies over suspected anti-competitive agreements related to submission of prices to Platts, a unit of McGraw Hill Group. Link this Share this Digg this Email Reprints

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