Yesterday (15 July) saw a MiFID II/MiFIR “Scrutiny Hearing” held at the European Parliament, at which Steven Maijoor, chair of ESMA, presented. The opening statement, which can be found here, contains some interesting comments. Of interest to those in commodity and energy trading will be the parts on position limits and the ancillary activity test.

In terms of position limits, there has been a great deal of debate about the number of limits, and the range of the limits, with some arguing that in illiquid markets the maximum limit should be higher and that in liquid market the range should also be different. The statement argues that the flexibility given to local regulators means that these should be set appropriately.

There has been a huge amount of debate about the ancillary activity tests, with the currently proposed ones potentially taking many energy and commodity companies into financial regulation. It was already announced by Steven Maijoor  that the tests are subject to review and the detail around the new ones are eagerly anticipated. What is clear from the statement is that the intent of the rule changes is still to move many market participant into financial regulation.