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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. | ||
=== | ===“...except for wholesale energy products traded on an OTF that must be physically settled”=== | ||
This curious exception to the commodity derivatives class is known elsewhere as the “[[REMIT carve-out]]”, and is dealt with in some depth [https://emissions-euets.com/internal-electricity-market-glossary/652-remit-carve-out here] by our friends at {{plainlink|https://emissions-euets.com|Emissions-EUETS.com}} — an excellent site you must explore if you haven’t already. REMIT is Regulation No 1227/2011 on the integrity and transparency of the wholesale energy markets. | This curious exception to the physically-settled commodity derivatives class in point (6) is known elsewhere as the “[[REMIT carve-out]]”, and is dealt with in some depth [https://emissions-euets.com/internal-electricity-market-glossary/652-remit-carve-out here] by our friends at {{plainlink|https://emissions-euets.com|Emissions-EUETS.com}} — an excellent site you must explore if you haven’t already. REMIT is Regulation No 1227/2011 on the integrity and transparency of the wholesale energy markets. | ||
In any case, but for that odd exception for wholesale gas and power traded on an OTF — which is a ''non''-non-discretionary venue not qualifying as a [[regulated market]] or an [[MTF]], so chapeau for the multi-dimensional negative there and note this is a very limited carve-out pertaining to wholesale participants in the gas and power industry — [[Exchange-traded products|exchange-traded]] commodity futures and options ''are'' in scope for MiFID, even where physically settled. Which we think makes sense: it would be arbitrary indeed to exclude a class of exchange-traded derivatives just because of their settlement method, when most of the “[[regulatey]]” things about them — the risk, the market infrastructure, the consumer protection requirements, the capital and solvency issues for clearers and settlers — are exactly the same. | |||
===What ''isn’t'' a {{t|MiFID}} financial instrument=== | ===What ''isn’t'' a {{t|MiFID}} financial instrument=== | ||