On 20 December 2023, the FCA published on its website a further update to ancillary activities exemption for commodity derivatives (2024-2025).
Earlier this year the FCA set out how firms could determine their use of the ancillary activities exemption for 2023-24.
The further update provides that following HM Treasury’s decision to put back the application of relevant changes to the ancillary activities test to 1 January 2025 and as confirmed in paragraph 7.6 of consultation CP23/27, the FCA will continue to apply the approach. This will enable firms to continue using the ancillary activities exemption for 2024-2025 where they were able to rely on the exemption for 2022-2023 based on trading relating to the last published information (which relates to 2018 to 2020) on the overall size of the market.
The FCA’s approach also maintains the additional flexibility for firms to have regard to their daily trading activity of the previous 3 years (2021-2023) for the purposes of continuing to rely on the exemption.