It now a week since the FCA MiFID II conference was held in London. The slides from the meeting have not yet been shared, but the key note speech by David Lawton of the FCA was published, and the text can be found here. The “conference pack” included a timeline from the FCA which advised that all applications for authorisation be submitted by July 3 2016 if possible, 6 months before the rules start. This is to ensure that authorisation is obtained in time. The Markets Media web site has this summary of the speech.

Those in the commodities and energy trading sector will soon need to establish whether they are in danger of losing their exemption from MiFID as a whole. Those who will need to comply with the full MiFID must prepare to meet all of the rules mentioned over the day, and apply for authorisation. It was stated, both in plenaries and in the “commodities stream” that “new MiFID” firms will be treated as any other applicant (i.e. the 3rd January 2017 is when MiFID will come into force).  It was also stated that the FCA will give “transitional guidance”.

In terms of CRD IV reference was made to a speech made the previous week where the possibility of extending the “Commodity Dealer” carve out is being serious consideration. Currently the rules are due to take effect for Commodity Dealers at the end of 2017. A further delay would enable the effects of MiFID to be properly digested before having to deal with the increased capital requirements of CRD IV and CRR.

The remainder of the commodities session reviewed the new RTS, in terms of ancillary activity tests and position limits. A summary of these changes can be found here.

The stream of reactions to MiFID has continued over the last weeks: This article on the Bloomberg website at various reactions, responses from regulators and potential costs. Meanwhile an article on the issues raised by MiFID II can be found in this month’s Commodities Now magazine here.

It would appear that the deadline will not move, and that the draft RTS is likely to become a reality. Market Participants are therefore well advised to begin planning compliance at least in the form of exemption calculations, as soon as possible.