The European Commission DG FISMA has provided this written answer to ESMA on the outstanding question of whether the market size test portion of the Ancillary Activity test must be calculated on a group basis, following a request for an answer earlier this year (see here). The letter states that the “test needs to be calculated by each person within a group that engages in either of the two relevant MiFID activities mentioned in Article 2(1 )(j). In consequence, the ancillary activities test must be calculated as many times as necessary for each separate person who trades in commodity derivatives within a group.“.
The test is defined by Regulatory Technical Standard 20, and must be used by those who wish to use the exemption from MiFID II as defined by Article 2(1)j, which primarily applies to those who trade energy and commodity derivatives. The test underwent several iterations over its life, with many outstanding questions (see here). This letter aims to close off some of the outstanding issues.