Clarification on the cumulative use of exemptions under MiFID II
- Category: MiFID
ESMA expressed the view that "the execution of orders in financial instruments between two non-financials directly and without any further intermediation by third parties as ancillary activity is not covered by the term 'dealing on own account when executing client orders' and would therefore not prevent the persons concerned from using the exemptions under paragraphs (d) and (j) of Article 2(1) MiFID II."
See more on MiFID II exemptions:
1. dealing on own account (Article 2(1)(d)),
2. ancillary activity (derivatives trader exemption - Article 2(1)(j)).
Electricity Balancing Network Code transitional arrangements - existing agreements affected
- Category: Network Codes
While negotiating any agreements with electricity transmission system operators it is necessary to take account of provisions of the draft ENTSO-E Network Code on Electricity Balancing.
It is only non-binding draft now - some may say. Never mind...
EMIR frontloading - serious regulatory risk
- Category: EMIR
Frontloading - the term involved with EMIR Regulation should seriously worry derivatives players these days.
Excess margin risk of the clearing client - individual account much better than omnibus
- Category: EMIR
The manner in which the excess margin is dealt with by the clearing broker depends on whether the clearing client has an omnibus or individual client account.
Firmness - financial hedge between bidding zones or capacity product
- Category: Network Codes
Who will pay for market spread?
Ban on re-use of collateral collected as initial margin
- Category: EMIR
Firms implementing re-use, re-pledge or re-hypothecation of initial margin as an essential component of their business models will have to reconsider strategies. Collateral transformation services may also be affected.
Concentration limits on collateral pursuant to EMIR draft RTS
- Category: EMIR
Pursuant to the draft RTS, depending on the assets' class, the concentration limits on initial and variation margins range from 10 to 50%. Non-financials below a clearing threshold shouldn't bother.
The two distinct MiFID II exemptions for EU ETS operators
- Category: MiFID
The EU ETS operators probable don't put to much weight whether they trade in the spot market or in emissions derivatives markets (particularly given the availability of financial products such as "daily futures" for instance), nevertheless, from regulatory point of view under MiFID II draft Directive each of these markets will be covered by distinct exemption.
Each of these exemptions have its own strict perimeters, which must be observed, unless EU ETS operator intends to apply for a MiFID licence.
EMIR dispute resolution procedures under EFET ERMTA and ISDA Protocol - dual approach
- Category: EMIR
Industry master agreements differentiate between the "standard" dispute resolution procedure on the one hand and the process designed specifically for resolving EMIR-mandated issues on the other. What are their inter-dependencies?
RRM conception crystallised
- Category: REMIT
Market participants may choose either to become an RRM themselves or to use one or more third party RRMs to submit transaction reports to the ACER.
Physically-settled commodity derivatives - regulatory mess
- Category: MiFID
Is it really physically-settled gas and power forwards traded on multilateral trading facilities (MTFs) are 'financial instruments' for MiFID purposes?
Physically settled derivatives in MiFID II - prepare for fundamental change
- Category: MiFID
Only physically-settled oil and coal commodity derivatives contracts as well as REMIT wholesale energy products deserved special treatment in the new financial market architecture created by MiFID II and MiFIR. All others traded on an OTFs will fall under financial instruments regulation.