ACER issues derivatives recommendation: ACER has published a recommendation on the regime applying to the derivative contracts referred to in section C.6 of the Annex I to MiFID 2 which have the characteristics of wholesale energy products that must be physically settled according to Article 4(1)(2), second subparagraph, and Article 89 of MiFID 2. ACER specifically recommends that the Commission's delegated acts clarify:
- ESMA's technical advice which contains wording sufficient to ensure the physical delivery of a given commodity;
- that if a wholesale energy derivative contract traded on an OFT cannot be settled in cash, it must be physically settled and therefore falls outside the scope of section C.6 of the Annex I to MiFID 2; and
- that forward contracts that must be settled with physical delivery (which are not derivatives) do not fall under the scope of section C.6 of the Annex I to MiFID 2.