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Dodd Frank, Mifid, Uncategorized

MiFID II updates, CFTC position limits

While there is not much news relating to MiFID II specifically for those in energy and commodities, the wider financial services world has seen a great deal of discussion and activity since the first anniversary of the rules took place (see here).

Any Investment Firm (which includes some energy and commodity market participants) needs to comply with most of the reporting rules under MiFID II, including the “transaction reporting” rules. Many have struggled to implement these complex rules. This article on the Bob’s Guide web site by Chrissy Chiu looks at issues faced by those reporting, and why transaction reports are often rejected. It also discusses possible penalties for non compliance as being potentially high, and points to a report stating that 48 firms are being investigated by the UK’s FCA for possible breaches.

Financial advisers have had to comply with many MiFID II requirements. According to this article on FT Adviser, many have struggled with the rules. On the banking side, this article on The Banker web site reports on the challenges of implementing rules across all member states that suit local markets. It also talks of the large amount of data gathered, and some of the unintended consequences that arise from the rules, such as a greater dependency on banks, which is the opposite of the intention. This article on the Asset Servicing Times web site reports that in many cases, the introduction of MiFID II has created a barrier to entry for smaller firms. Never the less, this speech made by Andrew Bailey, chief executive of the FCA, talks of many of the benefits of MiFID II.

Comments on CFTC position limits
Chris Giancarlo, the chair of the CFTC, made this speech at the FIA conference earlier this week. If includes a commitment to re propose the mandatory commodity derivative position limit rules that have not yet gone to completion, despite some previous progress (see here). The commitment was also reiterated by Heath Tarbert, who has been nominated as the next CFTC chair. The commitment was stated at a senate hearing around the appointment, as reported here on the S&P Global Platts web site

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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