The Draghi Report and regulating energy derivatives trading

Abstract There are difficult regulatory policy choices to be made for the European energy derivatives markets. With the experience of summer 2022 fresh in everyone’s mind, the Draghi Report points out the need for lowering energy costs in order to boost European competitiveness. In line with Europe’s broader strategic geopolitical aspirations, the report sets out various policy recommendations on energy derivatives markets. This coincides with the Article 90 MiFID II Review of Commodity and Energy Derivatives Markets, which aims to address any potential shortcomings in the current regulatory framework. This article aims to draw out the tensions between these different objectives and to provide a critical examination of the proposals made in the Draghi report. This article concludes that, although some of the proposals are perhaps less desirable from a financial markets perspective, there is room for improvement. This article proposes to look at, for example, further increasing regulatory cooperation and improving the regulatory information position.