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MAR, Mifid, REMIT

The regulatory burden

See here for an article on the Bloomberg website reporting on a speech made by Lord Hill about the possible reduction of new regulatory initiatives affecting the banking industry, following a review of financial legislation. The speech talks of possibly slowing the stream of legislation so that the industry and consolidate the rules, and also allow their intentions, such as the reduction of systemic risk, to be realised.

The commodities and energy trading sector is also experiencing an increase in the level of regulation. Only weeks after the second REMIT reporting deadline, MAR will take effect, on 3rd July. MAR will impact most firms in the sector, in many cases requiring an increase in monitoring capability as well as other measures. MiFID II is very likely to start on 3rd January 2018. It is likely that many in the sector will be required to set up regulated entities as part of MIFID II, depending on the shape of the final version of the Ancillary Activity test, due to come out at the end of the month. Position Limits under MiFID II will affect far more market participants.

These rules, and others, are likely to continue to hit the sector for some time. While the eventual list of new rules targeting the financial sector may well slow, the energy and commodities trading sectors are likely to need to spend the next few years improving their regulatory capabilities, in order to at least partially further implement the processes and technology found at banks.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.

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