The European Securities and Markets Authority (ESMA) has issued an opinion that is intended to help market participants to assess whether their activities in commodity derivatives can be considered as ancillary to their main business.
Article 2 of MiFID II lays down the exemptions from its scope of application. Under point (j) of Article 2(1), MiFID II does not apply to persons dealing on own account or providing investment services in specific cases, including where their activity is an ancillary activity to their main business provided that certain conditions are met.
Commission Delegated Regulation (EU) 2017/592 further specifies the criteria for establishing when an activity is to be considered as ancillary to the main business at a group level pursuant to Article 2(4) of MiFID II.
In particular, Article 2(3) of the Delegated Regulation lays down the rules for calculating the overall market trading activity. The calculation of the overall market trading activity is necessary for the establishment of the size of trading activity per market participant which ultimately will determine whether an activity is ancillary and, hence, whether a market participant falls within the scope of MiFID II.
Market participants and national competent authorities have found it difficult to determine the market size figures as there is no centralised place recording on-venue and off-venue transactions for commodity derivatives and emission allowances which is publicly available.
As such national competent authorities have asked ESMA to provide guidance for the determination of the market size figures to ensure the correct application of Article 2(3) of the Delegated Regulation.
View ESMA provides market size calculations for MiFID II ancillary text, 29 June 2017