Rapport ESMA Preliminary data report, on the introduction of the market correction mechanism"
The report identifies the potential consequences of the MCM on market participants’ trading behaviour and the effect it may have on the ability of market participants to effectively manage their risks.
The European Securities and Markets Authority, the EU’s financial markets regulator and supervisor, has today published its preliminary data report following the introduction of the market correction mechanism (MCM) in the EU Regulation.
The report describes the structure and main participants in the EU natural gas derivative market. It focuses on market indicators aimed at assessing the potential effects of the adoption of the MCM. Based on available data at this point in time, ESMA has not identified significant impacts resulting from the adoption of the MCM Regulation but notes that this should not be interpreted as the MCM not having any effects on financial markets in the future.
The report identifies the potential consequences of the MCM on market participants’ trading behaviour and the effect it may have on the ability of market participants to effectively manage their risks. In that regard, it includes a more qualitative analysis of the possible risks to CCP risk management and the potential impact on the clearing of derivatives.