Pearse Doherty (Donegal South West, Sinn Fein)
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209. To ask the Minister for Finance in relation to MiFID, if Ireland supports the setting of position limits at EU level or by the trading venue [49482/13]

Pearse Doherty (Donegal South West, Sinn Fein)
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210. To ask the Minister for Finance in relation to MiFID, if Ireland supports the application of position limits to all trading venues and to all over the counter trades. [49483/13]

Pearse Doherty (Donegal South West, Sinn Fein)
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211. To ask the Minister for Finance in relation to MiFID, if Ireland supports the application of position limits to each single month and all months combined [49484/13]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 209 to 211, inclusive, together.

Position limits are a regulatory tool designed to increase the ability of regulators to ensure stable markets and to prevent market abuse, and this is achieved through imposing limits on the extent to which certain financial market participants can take positions in the market in question. Position limits can be applicable to individual transactions or positions built up over time.

Ireland supports the imposition of a position limits regime through MiFID which will support market stability and help prevent market abuse. The position limits regime is set to apply to each class of commodity derivative. It will be supplemented by much greater transparency requirements, a position management regime and product intervention powers for the national competent authorities. We also support these important provisions.

In relation to the decision maker on the application of position limits, Ireland supports a decision making process which provides an important role for all relevant actors, including trading venues, national competent authorities (NCAs) and the European Securities Markets Authority (ESMA). It is important that trading venues co-operate fully with the NCAs and it is important that the NCAs bring to bear their knowledge and experience at ESMA level. ESMA should lead in relation to bringing a strong level of coherence and consistency into the decision making on position limits through setting the parameters in which decisions on position limits are made by the NCAs.

Of course the MiFID negotiations between the Council, the European Parliament and the Commission are still ongoing, with the Council agreement secured via a qualified majority (QMV) of member states. One possible compromise outcome is an enhanced role for ESMA, empowering it to provide an opinion where it considers an NCA to have made a decision inconsistent with the criteria it has set, and this could be supplemented by an added obligation on NCAs to explain the reasoning for its decision on its website in such instances. However, solutions are still under consideration by the co-legislators.

In relation to the detailed rules to be applied with respect to a position limits regime, it is likely that much of this will be left to level 2 legislation, which can provide for a more coherent and calibrated regime, determined at an EU level by ESMA.

In relation to the scope of EU financial services legislation on commodity and related derivative markets, it should be noted that the MiFID file, along with the Market Abuse Regulation (MAR) agreement secured under the Irish Presidency, and the European Market Infrastructure Regulation (EMIR), provide for a much stronger legislative framework for dealing with speculation in commodity derivative markets deemed to be harmful.