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Delay to application of CRR own funds requirement – provisional text published

The European Parliament has published provisional text to implement a further delay in the application of the own funds and large exposures requirements of the Capital Requirements regulation (CRR)  to Commodity Dealers, from December 2017 to December 2020. The text the can be found here, and is also reported on the Norton Rose Fulbright site here.

These provisions of CRR/CRD IV apply to financial counterparties. In the commodities and energy sector, such entities will be market participants who have been unable to use the Ancillary Activity exemption of MiFID II (or those who chose to set up a regulated entity), whose final text is expected soon. The exemptions will apply to those financial counterparties whose business consists of the provision of services related to commodity derivatives and related instruments (“Commodity Dealers”).

The rules have the potential to require market participants to set aside a significant amount of capital. The further delay is designed to permit the rules to be tailored to the specific requirements of the commodities sector.

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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