See here for a report on the Reuters website about comments made by Shell at a recent conference, warning of the impact of the upcoming MiFID II rules, and how they may change the commodity and energy trading industry. The comments are similar to many others, expressing the view that the loss of exemptions which the commodity and energy industry faces will lead to costs that will reduce margins to an unacceptably low level.
If a company loses their exemption, they become a “financial counterparty” under both MiFID and EMIR. This triggers required compliance not only with those rule-sets, but also in others such as CRD IV. There are many new requirements, including mandatory clearing (for those Non Financial Counterparties under the threshold), more reporting requirements and also capital requirements. These could prove to be very expensive for a trading business.
The report also refers to commodity position limits, which will apply regardless of status. Some of those rules could also inhibit certain traders in certain markets.
We will see how effective the lobbying has been final Regulatory Technical Standards for MiFID II are submitted. The deadline for this recently got delayed until September.