The Financial Conduct Authority (FCA), the UKs National Competent Authority, have issued this “application and notification” user guide for MiFID II, which commences on 3rd January 2018. Overall it outlines how market participants and venues under the FCAs jurisdiction should apply for authorisation under MiFID II in time for the deadline. The announcement also reminds entities that the FCAs “gateway” for applications will open on 30th January 2017.

Many in energy and commodities will make use of the Ancillary Activity exemption under Article  2(1)j of MiFID II, the form of which is outlined in RTS 20. The “Commodity regime” section 13 starting on page 49 gives on overview as to how the exemption should be notified to the FCA. Importantly it states that exemptions should be notified by 3rd January 2018. Further guidance is likely to be sought as to which data to use for the calculation in order to file for an exemption by this date.

The guide also indicates that any hedge exemption required under the position limits rules, as outlined in RTS 21, should be in place  by 3rd January 2018, and therefore be applied for  21 days  before that date. A hedge exemption under the position limits rules may only be used by a non financial counterparty, including those who rely on the ancillary activity exemption.