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.