On 14 February 2014, the European Securities and Markets Authority (ESMA) wrote to Michel Barnier, the European Commissioner for the Internal Market and Services, to highlight its concerns that an inconsistent application of the definitions of FX and physically settled commodity forwards could have a significant detrimental effect on the consistent application of EMIR and considered that it was essential that references to the MiFID definitions in the context of EMIR be clarified. On 26 February 2014, the Commission responded to ESMA and invited it to consider issuing guidelines on the application of the definitions of C6 and C7 of Annex 1 of MiFID.

ESMA has now published a consultation paper which sets out the draft guidelines. The deadline for comments on the consultation paper is 5 January 2014. ESMA will consider the responses to the consultation paper and expects thereafter to publish a final report, and final guidelines.

The draft guidelines are based solely on the current MiFID requirements. The potential impact of MiFID II and future implementing measures falls outside the scope of this exercise.

View ESMA consults on draft guidelines clarifying the definition of derivatives under MiFID, 29 September 2014