As originally reported by Risk.net (subscription required) on May 5, the Futures Industry Association (FIA) has asked HM Treasury to allow for a transitional period for commodity firms under the United Kingdom’s implementation of the revised Markets in Financial Instruments Directive (MiFID II).
MiFID II will become effective in January 2018, at which point commodity firms are expected to be authorized for those parts of their business which require authorization or rely on an exemption. However, under MiFID II RTS 20, commodity firms will only be able to determine whether they can rely on an exemption by carrying out calculations, which require three years of trading data up to December 31 before the authorization is required.
The UK Financial Conduct Authority (FCA) has stated that in order to guarantee that applications for authorization are reviewed and granted before MiFID II comes into effect, firms need to have submitted their application by July 3. It is due to this mismatch in time scales, between the data timeframe and the FCA’s deadline for guaranteed applications, that the FIA is pressing for a transitional regime.