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You may be minded, as the [[JC]] was, once, to wonder whether a these may qualify as a “[[Securitised derivative|''securitised'' derivative]]”, a “[[structured finance product]]” or a “[[Commodity derivatives|commodity derivative]]” — all legislative terms in the [[MiFID]]/[[MiFIR]]/[[EMIR]] memeplex. Proceed only if you are unusually tolerant to tension headaches, or have a lot of time to kill on a wet afternoon. For as best we can make out: | You may be minded, as the [[JC]] was, once, to wonder whether a these may qualify as a “[[Securitised derivative|''securitised'' derivative]]”, a “[[structured finance product]]” or a “[[Commodity derivatives|commodity derivative]]” — all legislative terms in the [[MiFID]]/[[MiFIR]]/[[EMIR]] memeplex. Proceed only if you are unusually tolerant to tension headaches, or have a lot of time to kill on a wet afternoon. For as best we can make out: | ||
{{Quote|‘[[commodity derivatives]]’ means those [[financial instrument]]s defined in point (44)(c) of Article 4(1) of [[MiFID]]; which relate to a commodity or an underlying referred to in Section C(10) of Annex I<ref> | {{Quote|‘[[commodity derivatives]]’ means those [[financial instrument]]s defined in point (44)(c) of Article 4(1) of [[MiFID]]; which relate to a commodity or an underlying referred to in Section C(10) of Annex I<ref>“Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF;”</ref> to [[MiFID]]; or in points (5), (6), (7) and (10) of Section C of Annex I thereto;}} | ||
Which means securities, such as certificates, do qualify as ''commodity'' derivatives ''if they relate to a commodity'', but emissions (and non-commodity underliers) do not. We know this because even the [[BaFin|BaFIN]] thinks this.<ref>See the [https://www.bafin.de/EN/Aufsicht/BoersenMaerkte/Derivate/PositionslimitsWarenderivate/positionslimits_warenderivate_artikel_en.html BaFIN on position limits.]</ref> Fair enough: non-commodities aren't commodities, but there appears to be no equivalent widening of non-commodity derivatives to include funded, asset-backed or securitised instruments. | Which means securities, such as certificates, do qualify as ''commodity'' derivatives ''if they relate to a commodity'', but emissions (and non-commodity underliers) do not. We know this because even the [[BaFin|BaFIN]] thinks this.<ref>See the [https://www.bafin.de/EN/Aufsicht/BoersenMaerkte/Derivate/PositionslimitsWarenderivate/positionslimits_warenderivate_artikel_en.html BaFIN on position limits.]</ref> Fair enough: non-commodities aren't commodities, but there appears to be no equivalent widening of non-commodity derivatives to include funded, asset-backed or securitised instruments. | ||