Legislation of Financial Markets and Instruments in Iran Emphasizing Energy and Oil Derivatives Transactions

Financial markets and one of its most important sub-sectors - energy and oil derivative transactions - have been the subject of legislation in the Iranian legislature for various reasons, to different degrees and in different ways. Given the potential importance of derivatives in the nation's energy economy, having an understanding of related laws is important. The purpose of this article is to understand the developments and challenges of the laws governing these markets and tools in Iran and to suggest measures to improve them. To this end, the relevant laws passed in the legislature from the beginning to the present have been examined in terms of reasons, provisions and approach to energy and oil derivatives transactions. In this study, the dominance of state-owned enterprises, confrontation with the dominant countries in the global financial system, conflict of interest and regulatory capture, and conflicting legislative functions have been identified as important challenges of energy and oil derivatives legislation and to overcome these challenges and achieve optimal legislation, the propositions are: precedence of privatization over promotion of derivatives, joint efforts for international and regional regulation, management of conflict of interest, and balancing the conflicting functions of laws.