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ESMA publishes opinion for 2019 ancillary activity test market sizes

On Friday, ESMA published an update of the opinion document for market sizes to be used as part of the ancillary activity test, adding estimated market sizes for the year 2019. The document can be found here.

The ancillary activity test is used by market participants that use the ancillary activity exemption found in MiFID II Article 2(1)j, and associated Delegated Acts (see here). The market sizes are used as the denominator in the “market size test” part of the calculation.  The 2019 total estimate has reduced for several of the commodities, in some cases quite significantly. Such a reduction makes it harder for firms trading in-scope products to pass the test and to be able to rely on the exemption.

From next year, the issue of the removal of the UK’s part of the market from the estimates will also need to be addressed due to Brexit (see here for the relevant letter from ESMA).

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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