The international umbrella group for securities regulators has published its recommendations for improving oversight of commodity futures markets, the International Organization of Securities Commissions said Thursday.

IOSCO’s Techincal Committee, its main policymaking body, published a final report prepared by its Task Force on Commodity Futures Markets, which contains recommendations to improve the supervision of commodity futures markets and global regulatory cooperation.

The recommendations focus on the ability of futures market regulators to access information about markets that they generally don’t have jurisdiction over, such as the cash and over-the-counter derivatives markets; improving regulators’ supervisory and enforcement powers; and the enhancing global cooperation.

“Commodities markets, and the trade in their related futures, are fundamental to a vibrant global economy. Given the growth in these markets, and recent volatility in commodities prices, there are concerns about the possibility of market manipulation involving both these futures markets and related physical and OTC derivative markets,” noted Kathleen Casey, chairman of the Technical Committee.

“The complexity and frequent opacity of factors that drive price discovery in the futures markets, combined with the critical importance of commodities markets to the world’s economy, argue for continued vigilance to promote the transparency of futures market price formation and the interconnections between regulated futures and related commodity markets,” she added. “IOSCO believes that the recommendations published today will ensure that regulators have the appropriate information and tools available to them to monitor futures markets effectively and act against any market manipulation.”

The Task Force, which was formed following concerns around the price rises and volatility in agricultural and energy commodities in 2008, focused on whether futures market regulators’ supervisory approaches were appropriate in light of recent market developments. While reports reviewed by the Task Force concluded that fundamentals rather than speculative activity was the plausible explanation for price changes, it has nevertheless made a number of recommendations to improve the transparency and supervision of these markets.

IE