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
Accounting for Tokenized Assets as Collateral
The use of tokenized assets as collateral for derivatives and securities financing transactions (SFTs) is emerging as a significant development in global capital markets. Financial institutions are increasingly evaluating tokenized representations of money market funds, government securities and other high-quality...
US Treasury Repo Clearing Indicator September 2026
The ISDA-Actrix US Treasury Repo Market Clearing Indicators illustrate central clearing adoption in the US Treasury repo market. Sponsored cleared repo volumes are used as a proxy to monitor client participation in central clearing, a key objective of the Securities...
CDM: User Journey from Concept to Production
The Common Domain Model (CDM) is a standardized, machine-readable and executable model for representing financial products, lifecycle events and contractual information. By providing an open source shared language across firms and platforms, it supports interoperability, automation, resource optimization and reduced...
ISDA DTF Tokyo Scott O'Malia Remarks
ISDA Derivatives Trading Forum Tokyo, October 23, 2026 Opening Remarks Scott O’Malia ISDA Chief Executive Good afternoon, and welcome to the ISDA Tokyo Derivatives Trading Forum. Thanks for joining us today, and a big thank you to our sponsors,...