The European Commission has adopted a Delegated Regulation regarding RTS on the application of position limits to commodity derivatives. MiFID II requires that competent authorities, in line with ESMA's methodology, establish and apply position limits on the size of a net position a person can hold in certain commodity derivatives and economically equivalent OTC (EEOTC) contracts. Following amendments to the original RTS submitted by ESMA, the Commission explains that the final provisions cap the upper position limits for new and illiquid contracts to 40%, but specifies that upper position limits of up to 50% can be imposed on a temporary basis. The proposed methodology also specifies how competent authorities are to consider volatility when setting position limits. The Delegated Regulation states that it will apply from 3 January 2017; however, this should probably be read as 2018, the revised implementation date of MiFID II.