MiFID II/MiFIR – Outlook into 2018

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Commodity Position Limits (Article 57 of MiFID II/RTS 21)

  • 28 September 2017 – ESMA and the national competent authorities ("NCAs") published an updated work plan for the opinions on pre-trade transparency waivers and position limits that are to be issued under MiFID II and MiFIR.
  • MiFID II requires ESMA to publish opinions on the position limits notified by NCAs for commodity derivative contracts, the compatibility of the limits proposed with MiFID II and the methodology set out in RTS 2139.
  • Since ESMA has announced that it will not be able to finalise and publish all the position limit opinions for liquid commodity derivative contracts by the end of 2017 and since MiFID II does not contain any transitional provisions, ESMA and the NCAs have agreed that NCAs will publish limits ahead of the publication of any opinions by ESMA.
  • The position limits published by the NCAs will enter into force on 3 January 2018. However, the NCAs will modify their position limits following the publication of the relevant opinions by EMSA so as to conform those limits with such opinion, or otherwise provide ESMA with a justification for why the changes are not necessary.
  • 10 August 2017 – ESMA has published only three opinions so far, which agree with position limits proposed by the Autorité des Marchés Financiers (AMF) relating to (i) rapeseed; (ii) corn; and (iii) milling wheat. No further opinions have been published to date.
  • 26 October 2017
    • The FCA has set certain commodity position limits for specific contracts, as listed on the following web page: fca.org.uk/markets/mifid-ii/commodity-derivatives/position-limits
    • Any other commodity derivatives traded on a UK trading venue which are not specifically identified in the table mentioned above on the FCA website will have a limit of 2,500 lots, unless the position limit is set by another competent authority in another Member State.


Trading Obligation (Articles 28 & 32 of MiFIR/draft RTS)

  • 29 September 2017 – ESMA issued its final report and submitted a final draft to the European Commission of RTS for implementing the trading obligation for derivatives under MiFIR40.
  • 17 November 2017 – The European Commission published its form of RTS on the trading obligation for derivatives41. The European Parliament and Council are now required to scrutinise the draft RTS. The period for scrutiny is one month however this is also extendable by a further month. The RTS are broadly similar to those proposed by ESMA.
  • Draft RTS
    • Classes of derivatives subject to Trading Obligation: The draft RTS specify that the following fixed-to-float IRS and CDS indices would be subject to on-venue trading:
      • Fixed-to-float interest rate swaps denominated in EUR;
      • Fixed-to-float interest rate swaps denominated in USD;
      • Fixed-to-float interest rate swaps denominated in GBP; and
      • Index CDS – iTraxx Europe Main and iTraxx Europe Crossover.


Derivatives Newsletter
November 2017


39 - Commission Delegated Regulation (EU) 2017/591 of 1 December 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the application of position limits to commodity derivatives.
40 - esma.europa.eu/sites/default/files/library/esma70-156-227_final_report_trading_obligation_derivatives.pdf
41 - ec.europa.eu/info/law/markets-financial-instruments-mifir-regulation-eu-no-600-2014/amending-and-supplementary-acts/implementing-and-delegated-acts_en


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