Shell joins BP in calls against excessive trading regulation

(Reuters) by Dmitry Zhdannikov and Ron Bousso – Royal Dutch Shell (RDSa.L) joined fellow oil company BP (BP.L) on Wednesday in calling on European regulators to refrain from imposing stricter capital requirements and greater disclosure measures on oil trading. Last month, the head of BP‘s trading division Paul Reed said some markets could be exposed to severe stress because of some looming EU regulations. Mike Muller, vice president for trading at Shell, sided with Reed’s views on Wednesday, saying regulators would achieve undesired effects if companies and trading houses were forced to follow stricter capital requirement rules or be limited in their ability to trade derivatives. European authorities will implement a set of regulations known as the Markets in Financial Instruments Directive (Mifid II) in 2017, which contains capital requirement directive (CRD IV) aimed at cutting systemic risks across equity, fixed income and commodity markets. “They (trading desks at trading houses and oil majors) don’t operate banking licences… They are not involved in lending activity… A failure of a commodity firm is unlikely to lead to a bank run…,” Muller told the Platts Crude Summit in London. Both BP and Shell trading divisions employ hundreds of people and trade millions of barrels … continue reading

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