ESMA has issued an Opinion in response to an EU Commission letter asking to amend its draft RTS 20 setting out criteria to be used in the determination of whether a non-financial firm’s commodity derivatives trading activity is considered to be 'ancillary' to its main business and can therefore be exempted from the scope of MiFID II. The EU Commission had asked ESMA to amend the business activity test contained in RTS 20 and to introduce a capital-based test for certain firms. ESMA has maintained that the business activity test, as currently proposed is in line with the objectives of the exemption and is not in favour of the introduction of a capital-based test as an alternative. ESMA has, however, set out proposals which could be taken into account should the EU Commission wish to pursue the capital-based test. ESMA has identified metrics for a numerator and denominator that could be used by the EU Commission to construct a capital test and proposes that entities should be allowed to choose between performing the original main business test based on trading activity or a capital test.