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CRDIV, Mifid

EBA data collection exercise for commodity derivatives firms

The European Banking Authority(EBA) have launched a data collection exercise, as part of the CRR (Capital Requirements Regulation)  rules, asking for data from companies who trade in commodity derivatives. The requesting document can be found here, and press release here. The data will be used to prepare  the appropriate regime for the “prudential supervision of investment firms whose main business consists exclusively of the provision of investment services or activities in relation to the commodity derivatives or derivatives contracts listed in points 5,6,7,9 and 10 of Section C of Annex I of Directive 2004/39/EC (MiFID) (‘commodities derivatives firms’)“.

Commodity derivatives firms falling into this category include those who must set up regulated entities (Investment firms) as a result of not being able to claim an “Ancillary Activity” exemption from MiFID II, as defined by Article 2(1)j and  RTS 20. Earlier this year, the own funds requirements of CRR were delayed for commodity derivatives firms until 2020.

The document suggests that the EBA will propose differing rules depending on the level of systemic risk exhibited by the firm, as well as size.

 

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on energy and commodity regulation. He has more than 20 years of experience in energy and commodity trading, credit, risk and financial technology. He has delivered a series of trading, credit and risk solutions to a wide variety of oil majors, power and gas companies and investment banks. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy 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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