The FCA has updated its webpage on the introduction of a position limits and reporting regime for commodity derivatives under MiFID II.

From 3 January 2018, trading venues are required to notify the FCA by email when the total open interest of any commodity derivative reaches any of the amounts of lots or number of securities in issue as required by Article 15(1) of regulatory technical standard 21, over a consecutive three month period.

From the 1 August 2017, the FCA expects the following notifications:

  • multilateral trading facilities and applicants for organised trading facilities authorisation inform of any new commodity contracts prior to launch;
  • regulated investment exchanges continuing notification of any new commodity contracts prior to their launch; and
  • all trading venues should share the contract specifications, specifically the commodity derivative name, market identifier code, venue product code and the relevant unit of measurement.

The position limit exemptions application will be available from the beginning of October on Connect. The exemptions application will be an uncapped exemption based on an assessment of the application. However, the FCA will monitor the reported positions against the information provided in the application form. If there is a significant change in the nature or value of the non-financial entity’s commercial or trading activities they should submit a new application.

Firms that have a reporting obligation but have not yet started the market data processor onboarding process should complete the relevant documentation as soon as possible to be able to commence testing in the week commencing 11 September 2017.

View FCA updates webpage on MiFID II commodity derivatives position limits and reporting, 4 August 2017