The Futures and Options Association fears a “thinly staffed” European Securities and Markets Authority could struggle to implement the European Commission’s review of Mifid.

The trade body supports the overall direction of the proposed changes, but has told the new pan-European regulator of significant concerns.

The FOA argues strongly against empowering national regulators to impose strategic position limits on contracts, particularly in commodities.

It argues that the role of commodity speculators is critically important, and that speculative activities should be addressed through what it calls the more dynamic and market-sensitive approach of position management rather than position limits.

The body also calls for commercial purpose physical forward and spot transactions to remain outside Mifid’s scope, in particular the EU regulated carbon markets.

The FOA is worried about the use of product bans, saying this could have severe implications for the function of markets. It wants to see more details on ban criteria.

It is also concerned that the workload for Esma will be intense, disrupting the process and timetable for implementation of Mifid Two.

More generally, the FOA feels the Mifid review places too many obligations and requirements on firms which could be duplicative and unnecessary. Some legislation is unnecessarily detailed, it believes, and appears to rest on the assumption that firms are not fit and proper to carry out their business.

Anthony Belchambers, chief executive of the FOA, said in a statement: “A number of the requirements in the review are needlessly oppressive, particularly the proposed limits on execution-only business and bilateral execution. Additionally, the swathe of costly disclosure obligations is more likely to confuse than inform customers.”