Investment banks and energy traders in London are opposing the European Commission's plan to enforce tougher regulation upon the energy trading markets, the Financial Times has reported.

<p>It is believed that the commission is intending to introduce the scheme, which would force energy traders to report their trading activities in a more transparent manner, alongside controversial plans to force integrated energy companies to divest assets such as pipelines and power grids. <br /><br />According to the Financial Times, the commission&#0039;s proposal would align the electricity and gas trading markets with the shares and bonds markets. This has led to concerns regarding liquidity, the report said. <br /><br />The report quoted a letter sent by six trade associations, as saying: In their current form [the proposals] risk damaging liquidity in wholesale electricity and gas markets. <br /><br />We believe strongly that the European Commission should be able to demonstrate a clear business case to justify these proposals. We remain to be convinced that any such business case has yet been proven, the letter continued.</p>