On May 31, the European Securities and Markets Authority (ESMA) updated a question and answer document relating to commodity derivatives (Q&A) under the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR).

The updated Q&A contains questions and answers relating to the following topics:

  • position limits—specifically the definition of ‘lot’ for energy products;
  • ancillary activity—including questions on who has to annually notify the relevant competent authority that they make use of the ancillary activity exemption, who it should be made to and by when it needs to be made. Also included are new questions relating to the privileged transactions exemption and the capital employed test; and
  • third country issues—specifically whether economically equivalent contracts traded on a third-country venue should be considered economically equivalent over-the-counter derivatives (EEOTC) for position limit and position reporting purposes under MiFID II.

The Q&A is available here.