82,964
edits
Dealing on own account: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 14: | Line 14: | ||
:—those persons do not apply a high-frequency algorithmic trading technique; and | :—those persons do not apply a high-frequency algorithmic trading technique; and | ||
:—those persons notify annually the relevant competent authority that they make use of this exemption and upon request report to the competent authority the basis on which they consider that their activity under points (i) and (ii) is ancillary to their main business;}} | :—those persons notify annually the relevant competent authority that they make use of this exemption and upon request report to the competent authority the basis on which they consider that their activity under points (i) and (ii) is ancillary to their main business;}} | ||
{{subtable|'''The [[de minimis threshold test]]''' <ref>Art 2(1)(a) of MiFID 2 RTS 20 at https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32021R1833</ref><br> | |||
2(1). The activities of persons referred to in Article 1 shall be considered to be ancillary to the main business at group level where they comply with any of the following conditions: | |||
:(a) the net outstanding notional exposure in commodity derivatives for cash settlement or emission allowances or derivatives thereof for cash settlement traded in the Union calculated in accordance with Article 3, excluding commodity derivatives or emission allowances or derivatives thereof traded on a trading venue, is below an annual threshold of EUR 3 billion ([[de minimis threshold test|De-Minimis Threshold Test]]); [...] <br> | |||
3(1). The net outstanding notional exposure referred to in Article 2, paragraph 1, point (a), shall be calculated by averaging the aggregated month-end net outstanding notional values for the previous 12 months resulting from all contracts in commodity derivatives for cash settlement or emission allowances or derivatives thereof for cash settlement entered into in the Union by a person within a group. | |||
The net outstanding notional values referred to in the first subparagraph shall be calculated on the basis of all contracts in commodity derivatives for cash settlement or emission allowances or derivatives thereof for cash settlement that are not traded on a trading venue to which any person located in the Union is a party during the relevant annual accounting period referred to in Article 6(2). | |||
The contracts in commodity derivatives or emission allowances derivatives for cash settlement referred to in the first and second subparagraph shall include all derivative contracts relating to commodities or emission allowances which 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. | |||
3(2). The aggregation referred to in the first paragraph shall not include positions from contracts resulting from transactions referred to in Article 2(4), fourth subparagraph, points (a), (b) and (c), of Directive 2014/65/EU or from contracts where the person within the group that is a party to any of them is authorised in accordance with Directive 2014/65/EU or Directive 2013/36/EU. | |||
3(3). The net outstanding notional values referred to in paragraph 1 shall be determined pursuant to the netting methodology of Article 5(2). | |||
3(4). The values resulting from the aggregation referred to in this Article shall be denominated in euro.}} | |||
}} | }} | ||
===Dealing on own account generally=== | ===Dealing on own account generally=== | ||
| Line 45: | Line 59: | ||
*they annually notify their competent authority that they are using this exemption and, when asked, explain how consider their activity to be “ancillary to their main business”;}} | *they annually notify their competent authority that they are using this exemption and, when asked, explain how consider their activity to be “ancillary to their main business”;}} | ||
Ok we are getting somewhere, but — ah: there is this gnomic question of what counts as “ancillary to one’s main business”. Fear not: Article 2 also addresses that, but punts it off to ESMA to come up with some regulatory technical standards governing it. This has been recently updated and you can find the latest — as of June 2022 — | Ok we are getting somewhere, but — ah: there is this gnomic question of what counts as “ancillary to one’s main business”. Fear not: Article 2 also addresses that, but punts it off to ESMA to come up with some regulatory technical standards governing it. This has been recently updated and you can find the latest — as of June 2022 — [https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32021R1833 here]. | ||
There are three alternative ancillary activity tests. Under the “'''[[de minimis threshold test]]'''”, a person’s activity is ancillary to its main business if its ''net outstanding notional exposure'' in cash settled commodity products traded in the EU, excluding those traded on a venue, is less than EUR 3 billion annually. The other two tests are a bit more speculative and fiddly to calculate, but for a repackaging SPV, the first one gives plenty of room to work with. | |||
“Excluding those traded on a venue?” We suppose this exclusion is predicated on there being someone else involved in an on-venue trade who has the appropriate permissioning, so these naturally should not count | |||
The annual threshold should be calculated against an average over three-years on a rolling basis. | The annual threshold should be calculated against an average over three-years on a rolling basis. | ||
This is all good stuff, if you can monitor, and keep a lid on, your commodity product exposure, or — if you are some kind of securitisation vehicle — you may wonder what “net” exposure means, and may be happy to see Article 3 of the RTS which goes on, in nutshell (full text to the right) to say: | |||
{{quote|You calculate the “net outstanding notional exposure” by averaging the aggregated month-end net outstanding notional values for the previous 12 months resulting from all contracts in in-scope commodity products that may be cash settled and ''that are not traded on an EU trading venue'' between 1 January as 31 December in any year. | |||
}} | |||
{{sa}} | |||
*[[Repackaging programme]] | |||
{{ref}} | |||