ISDA, the Association for Financial Markets in Europe and FIA have published a position paper on the European Commission’s market correction mechanism proposal for natural gas prices in the European Union. The proposed mechanism would set a price cap on the TTF front-month future contract price when certain conditions are met.
The associations urge policymakers to avoid imposing any price cap on the wholesale gas market and instead focus effort on securing supply, reducing demand, supporting the liquidity needs of energy firms and accelerating the energy transition.
The paper highlights the detrimental implications that the proposed mechanism would have on liquidity and risk management, and warns that it would introduce unacceptable levels of systemic and operational risk while not necessarily achieving the primary policy objective to reduce power and gas prices for consumers. The paper also asserts that this measure could undermine trust in the European gas market, discouraging market participant activity.
Click on the attached PDF to read the paper.
Documents (1) for ISDA, AFME and FIA Paper on EC Market Correction Mechanism Proposal
Latest
Updated OTC Derivatives Compliance Calendar
ISDA has updated its global calendar of compliance deadlines and regulatory dates for the over-the-counter (OTC) derivatives space.
ISDA Feedback on Identifying Reference Data
On July 20, ISDA submitted feedback to the European Securities and Markets Authority (ESMA) on draft Level 3 guidance on several technical issues caused by the interaction of the recently adopted regulatory technical standard on derivatives transparency (RTS 2) and...
US Basel III Endgame 2026 Update
In March 2026, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation published a new proposal for capital rules known as the US Basel III, based...
Episode 59: Reducing Burdens
As she nears the end of her term as chair of the European Securities and Markets Authority, Verena Ross joins The Swap to discuss progress in simplifying and reducing the burden of EU financial regulation, including transaction reporting. Please view...