The guidelines issued by ESMA concern the application of the definition of commodity derivatives and their classification under C6 and C7 listed in section C, Annex I of MiFID and apply from 7 August 2015. Different interpretations on what should constitute a financial instrument and what should be classified as a commodity derivative may lead to an inconsistent application of MiFID and EMIR among competent authorities and could lead to the reporting of certain transactions in one Member State but not in others. ESMA has stated that definition C6 has a broad application, applying to all commodity derivative contracts, including forwards, provided that they can or must be physically settled and they are traded on a regulated market and/or an MTF. C7 forms a category that is distinct from C6 and applies to commodity derivative contracts that can be physically settled which are not traded on a regulated market or an MTF provided that the commodity derivative contract : (i) is not a spot contract as defined under Article 38(2) of Regulation 1287/2006/EC; (ii) is not for commercial purposes described under Article 38(4) of Regulation 1287/2006/EC; and (iii) meets one of the three criteria under Article 38(1)(a) and also the separate criteria under Article 38(1)(b) and 38(1)(c) of Regulation 1287/2006/EC. The phrase “physically settled” incorporates a broad range of delivery methods, including physical delivery of the relevant commodities themselves, delivery of a document giving rights of an ownership nature to the relevant commodities or quantity thereof; or another method of bringing about the transfer of rights of an ownership nature in relation to the relevant quantity of commodities without physically delivering them (including notification, scheduling or nomination to the operator of an energy supply network) that entitles the recipient to the relevant quantity of the commodities.