MiFID II—commodities exemptions
Produced in partnership with Puesan Lam and Tony Katz of DLA Piper LLP
MiFID II—commodities exemptions

The following Financial Services guidance note Produced in partnership with Puesan Lam and Tony Katz of DLA Piper LLP provides comprehensive and up to date legal information covering:

  • MiFID II—commodities exemptions
  • Staying clear of regulation—the options for commodities firms
  • Changes to the previous MiFID I commodities exemptions
  • The 'ancillary activity' exemption under MiFID II
  • The first test
  • Privileged transactions
  • The second test
  • The delegated regulation
  • ESMA's opinion
  • Delegated regulation
  • more

BREXIT: UK is leaving EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For guidance, see Practice Notes: Brexit—impact on finance transactions—Key issues for derivatives transactions, Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs and The impact of Brexit on the MiFID II regime.

The scope of the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II) has been significantly broadened to include a range of commodities firms that were excluded from the original Markets in Financial Instruments Directive (Directive 2004/39/EC) (MiFID). Commodities firms face a tougher task if they wish to avoid being regulated under the MiFID II regime. This Practice Note focuses on changes to the commodities exemptions in MiFID II, in particular the new ‘ancillary activity’ exemption in Article 2(1)(j), as further detailed in regulatory technical standards.

Staying clear of regulation—the options for commodities firms

The publication of the European Securities and Markets Authority (ESMA) Final Report on 28 September 2015, which set out draft Regulatory Technical Standards (RTS), the subsequent European Commission draft Delegated Regulation on 1 December 2016 (C(2016) 7643 final), and the final Commission Delegated Regulation (EU) 2017/592 (RTS 20) provide more detail as to the scope of MiFID II and the steps that commodities firms must take if