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ESMA Publishes Statement Announcing Supervisory Approach to MiFID II Position Limits for Commodity Derivatives

On March 19, the European Securities and Markets Authority (ESMA) published a statement announcing a new Directive relating to its supervisory approach to position limits for commodity derivatives under the Markets in Financial Instruments Directive (MiFID II) (the Statement).

The Directive will amend MiFID II and is expected to help the European Union’s economic recovery from the COVID-19 pandemic by reducing the scope of commodity derivatives that are subject to position limits. The new provisions will start to apply in early 2022.

In preparation for the new provisions, ESMA expects national competent authorities to not prioritize their supervisory actions relating to:

  • entities holding positions in commodity derivatives, other than agricultural commodity derivatives, with a net open interest below 300,000 lots over a one-year period; and

  • positions that are objectively measurable resulting from transactions entered into to fulfil obligations to provide liquidity on a trading venue as referred to in Article 2(4) of MiFID II.

ESMA’s statement announcing a new Directive to its supervisory approach to position limits for commodity derivatives under MiFID II.

©2021 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 85
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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666
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