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SPVs in Ireland: Difference between revisions
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{{quote|“Dealing on own account involves position-taking which includes proprietary trading and positions arising from market-making. It can also include positions arising from client servicing, for example where a firm acts as a systematic internaliser or executes an order by taking a market or ‘unmatched principal’ position on its books. | {{quote|“Dealing on own account involves position-taking which includes proprietary trading and positions arising from market-making. It can also include positions arising from client servicing, for example where a firm acts as a systematic internaliser or executes an order by taking a market or ‘unmatched principal’ position on its books. | ||
Dealing on own account may be relevant to firms with a dealing in investments as principal permission in relation to MiFID financial instruments, but only where they trade financial instruments on a regular basis for their own account, as part of their MiFID business. We do not think that this activity is likely to be relevant in cases where a person acquires a long term stake in a company for strategic purposes or for most venture capital or private equity activity. Where a person invests in a venture capital fund with a view to selling its interests in the medium to long term only, in our view he is not dealing on own account for the purposes of MiFID.”}}</ref> | Dealing on own account may be relevant to firms with a dealing in investments as principal permission in relation to MiFID financial instruments, but only where they trade financial instruments on a regular basis for their own account, as part of their MiFID business. We do not think that this activity is likely to be relevant in cases where a person acquires a long term stake in a company for strategic purposes or for most venture capital or private equity activity. Where a person invests in a venture capital fund with a view to selling its interests in the medium to long term only, in our view he is not dealing on own account for the purposes of MiFID.”}}</ref> Indeed, MiFID is meant to ''protect'' people like that, not ''regulate'' them. | ||
''Anyway''. When trying to bring commodity derivatives and EUAs into scope for MiFID, the regulations and technical standards do a curious job of them handling the usual exemptions, such as those under Art 2(1)(d), which says: | |||
{{quote|Persons dealing on own account in [[financial instrument]]s ''other than [[commodity derivative]]s or [[emission allowance]]s or derivatives thereof'' and not providing any other [[Investment service - MiFID Directive Provision|investment services]] or performing any other investment activities in financial instruments ''other than commodity derivatives or emission allowances or derivatives thereof'' unless such persons: | |||
:(i) are [[Market maker|market makers]]; | |||
:(ii) are members of or [[Regulated market|participants in a regulated market]] or an [[MTF]], on the one hand, or have direct electronic access to a trading venue, on the other hand, except for non-financial entities who execute transactions on a trading venue which are objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity of those non-financial entities or their groups; | |||
:(iii) apply a high-frequency algorithmic trading technique; or | |||
:(iv) [[deal on own account]] when executing client orders; | |||
Persons exempt under points (a), (i) or (j) of MiFID II Article {{mifid2prov|2(1)}} are not required to meet the conditions laid down in this point in order to be exempt.}} | |||
All very tedious, but what is going on here is exactly as presaged above: if you are just a regular joe, and you aren’t making markets, using algos, executing client orders, or directly accessing a regulated market, you aren’t required to be authorised under MiFID 2 ... ''unless your transacting in [[commodity derivatives]] or emission allowances''. | |||
Like, ''what''? we have gone from commodities being ''out of scope'' from MiFID altogether, to being ''in scope'' for MiFID 2, even when normal MiFID instruments aren’t. That ''cannot'' have been what the regulators intended. Can it? | |||
{{sa}} | {{sa}} | ||
*[[ICAV]] | *[[ICAV]] | ||