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Position limits calculations and offerings

Although there has been  push back on the final version of the rules (see here ) the start date of the MiFID II position limits draws closer. Unavista have announced this offering which helps market participants to report data to regulators under the position reporting aspects of the rules. The mechanism for such reporting is still not entirely final, especially given that the FCA consultation has stated that only investment firms need report. Since regulators will also need data from non investment firms it remains to be seen how this data will be collected.

While the rules do not explicitly require that market participants calculate the level of their own limits, most will wish to do so, in order to establish whether they are near a limit. This post by Gordon Allot of Broadpeak looks at some of the issues around the spot/other split.

Any market participant trading commodity derivatives will need to observe these rules, whether they pass the ancillary activity test  or not. This is in contrast to the rest of MiFID, which is generally implemented by those who must set up regulated entities. It is worth understanding the order of magnitude of compliance in the coming weeks to determine when to start planning any necessary projects.

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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