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ESMA Q&A Update – MiFID II and MiFIR Commodity Derivatives Topics

Topic

MiFID II and MiFIR commodity derivatives

Date:

23 September 2022

Regulations

MiFID II and MiFIR

CDR 2021/1833

RTS 21a

Level of Significance of Change

Minor

Main Points

The latest Q&A update is tied to the release of Commission Delegated Regulation (EU) 2022/1302 (RTS 21a) in April 2022 regarding position limits on commodity derivatives and changes to the ancillary activity exemption.

How Does This Change My Reporting?

Under Articles 57(1) and 58(1) of MiFID II, securitised derivatives are no longer subject to position limits and position reporting respectively.

With the update to Article 2(1)(j) of MiFID II, there is no longer a need to notify the relevant NCA of the ancillary exemption. However, firms must carry out an annual ancillary activity test in the first quarter of the calendar year and when a firm can no longer make use of the ancillary activity, the firm must apply to the NCA for a license.

What Do I Need to Do?

No reporting changes necessary.

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Quinn Perrott

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Quinn Perrott

Quinn is co-CEO and founder of TRAction and focuses on assisting clients in Europe, Asia and Australia to meet their regulatory requirements with trade and transaction reporting solutions as well as development of the best execution platform. With a background in IT, Quinn started in the financial markets as IT Manager for City Index. He then co-founded and worked as a General Manager at one of Australia’s largest margin FX and CFD providers. Quinn has provided educational sessions to Australia’s regulatory bodies in relation to operational aspects of derivatives and trading platforms.