BP PLC 
By The draft law, to be presented by the European Union's regulation chief Michel Barnier, is a central plank of the bloc's response to the rigging of the London Interbank Offered Rate (Libor) - a benchmark used to price products from home loans to credit cards worth $300 trillion.
But while the new rules, which will also apply to benchmarks used to set the price of physical commodities such as North Sea Brent crude oil, introduce regulation to an area that thrived beyond the scrutiny, they will chiefly rely on countries to enforce them, according to a draft seen by Reuters.
An earlier suggestion that the European Securities and Markets Authority (ESMA), a thinly-staffed fledgling EU body based in Paris, could do alone the job was dropped.
In the draft document, officials instead say that groups of supervisors from different countries, as well as ESMA, should exchange information.
Industry lobbyists conceded that the European Commission, which proposes draft EU laws before they are approved by the bloc's countries and parliament, has softened the rules, but they still want a further scaling back.
"The EU has watered it down a bit," said one oil industry executive, speaking on condition of anonymity. "But there are still some big problems - like requiring price reporting agencies to make their source sign a code of conduct."
Price assessment agencies Platts, a unit of McGraw-Hill
"As it makes its way through the European legislative process, we will continue to work with regulatory and legislative officials," a spokesman for Platts said.
Argus earlier this year warned that the new rules could make benchmarks unworkable.
Following criticism, the draft rules attempt to avoid imposing liability should the benchmark prove misleading although lobbyists said that a proposal that participants sign a code of conduct could scare some off.
The gentle legislative response follows total fines of $2.6 billion on Royal Bank of Scotland (>> Royal Bank of Scotland Group plc), Barclays (>> Barclays PLC) and Swiss bank UBS (>> UBS AG) over the rigging of Libor.
The Commission's antitrust chief continues to probe benchmarks including Libor and has also raided offices of oil majors Shell
The European Parliament and EU member states will have to approve the draft before it become law, a process that could drag on for years.
(Additional reporting by Peg Mackey in London; editing by David Evans)
By Barbara Lewis and John O'Donnell
