March 27, 2018

ESMA updated the questions and answers (Q&As) on the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) regarding commodity derivatives topics. This update includes clarifications on issues related to the MiFID II/MiFIR regime for commodity derivatives, including on position limits and position reporting.

The update includes new or revised answers on the following topics:

  • Position limits. The Q&A clarifies the circumstances under which less liquid contracts may receive bespoke position limits established by the relevant national competent authority. In addition, it introduces a tailored approach to the development and application of commodity position limits for spread contracts.
  • Position reporting. The Q&A clarifies that where an OTC contract is economically equivalent to more than one exchange-traded derivative (ETD) contract traded on a trading venue in the EU and where those ETD contracts do not qualify as the same derivative contract in accordance with Article 5(1) of RTS 21, positions in the economically equivalent OTC contract can be reported to any of the national competent authorities of the trading venues where the ETD contract is traded.

The purpose of this document is to promote common supervisory approaches and practices in the application of MiFID II and MiFIR in relation to commodity derivatives topics. The Q&A document provides responses to questions posed by the general public and market participants in relation to the practical application of data reporting requirements.

 

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Keywords: Europe, EU, Securities, Q&A, Commodity Derivatives, Position Limits, Position Reporting, MiFID/MiFIR, ESMA

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