The purpose of these guidelines is to provide a uniform and consistent application of the definitions of commodity derivatives under C6 and C7 of Annex I of the current MiFID I, until MiFID II comes into force on 3 January 2017, when the EC issues its delegated acts in relation to these definitions.
Currently there is no single, commonly adopted definition of derivatives in the EU under MiFID I, particularly in the case of physically settled commodity forwards. The existing different national applications of the MiFID definitions are resulting in the inconsistent application of EMIR, which refers to the MiFID commodity derivatives definition. These guidelines therefore clarify the definitions by specifying, in particular, what is meant by “physically settled” and confirming that forwards traded on a regulated market or Multilateral Trading Facility (MTF) fall within the scope of MiFID I, Annex C6.
ESMA is mindful that under MiFID II the Commission is empowered to prepare delegated acts to further define C6 and C7 and ESMA presented its technical advice in this regard in December 2014. However, ESMA sees no inconsistencies between these guidelines and its advice to the Commission.
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