European Union banks and asset managers are set to win looser rules on buying and selling bonds and derivatives, after the bloc's executive branch called for a rewrite of restrictions on securities.

The European Commission pushed back against proposed European Securities and Markets Authority (ESMA) regulations that demanded increased transparency in non-equity markets, saying a "more cautious approach" was needed for securities that are hard to trade, according to a letter from the commission to ESMA that was obtained by Bloomberg News. ESMA, which is in charge of writing the standards, said it was considering how to respond.

The commission said the current draft standards "might identify too many bonds as liquid instruments" and need revisions to ensure the regulations accurately reflect market liquidity. It sent two additional letters to ESMA, including a request for changes to proposed curbs on commodity trading.