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Welcome to the Financial Market Supervisory Authority

Commodity markets


We regulate commodity derivatives, but not the underlying physical markets. Find out more about this and how we address the regulatory challenges of the commodity markets in our policy formulation and supervision.

We supervise certain firms and market operators active in commodity derivative markets. We work closely with our regulatory counterparts overseas and with physical market authorities such as Ofgem.

We play a leading role in developing commodities policy and regulation globally through IOSCO and within Europe through ESMA.

The scope of our regulation

We use the term ‘commodity markets’ to mean both the financial commodity derivative markets that we regulate and the underlying physical market, which we do not regulate. We use ‘commodity derivative’ and ‘physical’ when we specifically mean these.

Commodity derivatives have been within the scope of UK regulation since the Financial Services Act 1986 (FS Act) came into force. The FS Act captured:

  • futures (which, for these purposes, includes some physical forwards and does not relate exclusively to exchange-traded products)
  • contracts for difference, and
  • options on financial instruments (as well as currencies and precious metals)

The Financial Services and Markets Act 2000 (FSMA) did not materially change the scope of commodity market instruments covered under UK regulation.

EU regulation

The Markets in Financial Instruments Directive (MiFID), which came into effect in November 2007, brought commodity derivatives within the scope of EU financial services legislation for the first time.

There is some overlap between the MiFID and FSMA scope but they are not identical. FSMA is more comprehensive in capturing firms under a domestic regime that are not within MiFID scope.

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