ESMA has release three updated Questions and Answers documents on MiFID II:
The commodity derivatives document features an extensive new set of answers on the topic of position reporting. This is carried out by investment firms who report positions to National Competent Authorities. The answers confirm that only investment firms and venues carry out such reporting, and address which positions must be reported by them. The answer also address the issue of “end client reporting” where the investment firm is required to dis-aggregate positions reported down to the end client level.
Despite the requirement only applying to investment firms, it is important to note that energy and commodity market participants who are non investment firms will still need to provide certain types of data breakdown, such as “hedge flagging”, to the venues on which they trade.
The Q+A also confirms that hedge exemptions for non investment firms only need to be applied for if the exemption is required, i.e. without it the firm would breach a limit.
There are no new answers on the ancillary activity test. However the market size opinion recently issued by ESMA (see here) has now been updated with revised figures for emissions and “C10” instruments (see here and here for an article on the topic by Platts).
The data reporting Q+A gives some field specific information on transaction reporting, and also states that actionable Indications of Interest are subject to order record keeping requirements.
The market structures Q+A contains several new answers on the topic of venues, and in particular addresses the issue of whether non investment firms may have direct access to regulated markets (exchanges) and multilateral trading facilities.
While these answer fill several gaps in the knowledge of those needing to comply with the rules, many questions do remain unanswered.