EU draft rules would boost watchdog powers -lawyers
* Regulation paves way for position limits
* EU proposals seen as more rigid than in U.S.
* Oil volumes likely to leave Europe
By Emma Farge
LONDON, Dec 3 (Reuters) - European regulators will gain unprecedented powers to control commodity markets through trade caps and heightened intervention if a draft EU document becomes binding, specialist lawyers said on Friday.
Commodities are being integrated into sweeping reforms to the European Union's markets in financial instruments directive (MiFID), which is due to be released next week.
A draft version seen by Reuters increases surveillance of market activities and allocates new powers to set U.S.-style position limits to restrict speculative trade.
"I think there are some risks in this, and the framework of this paper seems to suggest a fairly significant increase in regulatory intervention. Some is foreshadowed at the G20 level and some of it isn't," said Chris Bates, a partner at Clifford Chance with a focus on financial services regulation. Continued...