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Mifid, Uncategorized

MiFID II position limits opinions – and anniversary comments

ESMA has published “opinion” documents on six position limits set under MiFID II. The limits themselves have already been announced by the relevant National Competent Authority. Each opinion has confirmed the limit at the level originality set. The documents explain the rationale for each limit, how the deliverable supply has been calculated and how spot month is established. The opinions can be found as follows:

  • ICE Low Sulphur Gasoil (FCA) – here
  • EEX Panamax TC Freight (BaFin) – here
  • ICE Endex Dutch TTF Gas (AFM) – here
  • Powernext Dutch TTF Gas (AMF) – here
  • ICE Endex Dutch Power Physical Base (AFM) – here
  • ICE Endex Dutch Power Physical Peak (AFM) – here

The list of limits about which opinions have been issued, together with links, can be found here. This list of new opinions is the first since October 2018 (see here).

Transparency calculations for commodity derivatives
ESMA has published transitional transparency calculations for commodity derivatives under MiFID II, which can be found here. These are required in order to determine the large-in-scale (LIS) and size specific to the instrument (SSTI) thresholds for pre-trade and post-trade transparency purposes. As explained in the relevant  FAQ document (see here section E10), the originally published numbers has been modified for some instruments.

MiFID II anniversary comments
Since the first anniversary of MiFID II (see here), there have been many additional commentary pieces reviewing how the ruleset has impacted various parts of the financial services industry.

This article by Shanny Basar on the Traders Magazine web site refers to a “grace period” in 2018, and looks at how transparency, best execution, transaction reporting and market abuse will be handled this year. This article on discusses how the research unbundling rules under MiFID II are now being implemented globally by some firms.

In the meantime, Gina Miller of SCM Direct has complained at the lack of enforcement of the cost disclosure elements of MiFID II by the FCA, as reported here on the Portfolio Adviser web site. This article by Julian Cash on the Money Marketing web site suggests that while many have found the rules complex to implement, and that MiFID II has not been perfect, the industry would do well to support the rules.

As 2019 unfolds, it will be interesting to see whether MiFID II has any further impact on the energy and commodities industries.



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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