Commodities trading: ESMA has issued comprehensive data determining the EU overall commodities derivatives turnover that help commodities traders to assess whether their trading activities in commodity derivatives can be considered as ancillary to their main business under MiFID II.
Commodities traders trading in commodities derivatives either listed on an EU domiciled trading venue or OTC with a counterparty domiciled in the EU will have to apply for a license under the MiFID II regime that will enter into force on the 3rd of January 2018, unless an exemption applies. One key exemption applicable to commodities traders is the so called “ancillary activity exemption”. The “ancillary activity exemption” comprises a series of tests and compares in particular the proprietary speculative trading activities in commodities derivatives of a commodity trader to the EU overall market trading activity in certain commodities derivatives categories. The EU overall market trading activities in commodities derivatives either being traded on an EU domiciled trading venue or OTC with a counterparty domiciled in the EU have so far not been easy to determine due to missing public data. ESMA has now published EU overall market trading turnover data in the MiFID II-affected commodities derivatives categories.
Commodities traders should now – if they have not already done so – start to evaluate whether they can take advantage from the ancillary activity exemption and how to comply with the rest of MiFID II.
We had the great fortune to be able to assist many commodities traders in their MIFID II implementation and would be delighted to assist also you.
Please call for your free consultation.
Head Commodities Trading Regulation
Tel. +41 76 341 65 43