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Dealing on own account: Difference between revisions
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{{subtable|{{mifid2prov|2(1)(j)}} persons: | {{subtable|{{mifid2prov|2(1)(j)}} persons: | ||
:(i) dealing on own account, including market makers, in commodity derivatives or emission allowances or derivatives thereof, excluding persons who deal on own account when executing client orders; or | :(i) dealing on own account, including market makers, in commodity derivatives or emission allowances or derivatives thereof, excluding persons who deal on own account when executing client orders; or | ||
:(ii) providing investment services, other than dealing on own account, in commodity derivatives or emission allowances or derivatives thereof to the customers or suppliers of their main business; <br> | :(ii) providing [[investment services]], other than dealing on own account, in commodity derivatives or emission allowances or derivatives thereof to the customers or suppliers of their main business; <br> | ||
provided that: | provided that: | ||
:—for each of those cases individually and on an aggregate basis this is an ancillary activity to their main business, when considered on a group basis, and that main business is not the provision of [[ | :—for each of those cases individually and on an aggregate basis this is an ancillary activity to their main business, when considered on a group basis, and that main business is not the provision of [[investment services]] within the meaning of this Directive or banking activities under Directive 2013/36/EU, or acting as a [[market-maker]] in relation to [[commodity derivatives]], | ||
:—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;}} | ||
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''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 {{mifid2prov|2(1)(d)}} (see full text in panel on right), which, in a nutshell, exempts from MiFID: | ''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 {{mifid2prov|2(1)(d)}} (see full text in panel on right), which, in a nutshell, exempts from MiFID: | ||
{{quote|{{mifid2prov|2(1)(d)}} Persons dealing on own account '''''other than in commodity products''' and who do not provide any other [[ | {{quote|{{mifid2prov|2(1)(d)}} Persons dealing on own account '''''other than in commodity products''' and who do not provide any other [[investment services]] or do any [[investment activities]] ''other than in commodity products'' unless they are [[Market maker|market makers]] participate on or have [[direct electronic access]] to [[Regulated market|a regulated market]] or [[MTF]] (excluding corporates who trade to hedge their commercial or financing activity in an objectively measurable way), use high-frequency trading algorithms, or are executing client orders.}} | ||
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 beyond your normal funding and hedging activity, you don’t need to be authorised under MiFID 2 ... ''unless you’re transacting in commodity products''. | 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 beyond your normal funding and hedging activity, you don’t need to be authorised under MiFID 2 ... ''unless you’re transacting in commodity products''. | ||
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{{quote|{{mifid2prov|2(1)(j)}} persons who “deal on own account” commodity products, as long as they are not executing client orders or providing other [[investment services]] in commodity products to their customers or suppliers, an further provided that: | {{quote|{{mifid2prov|2(1)(j)}} persons who “deal on own account” commodity products, as long as they are not executing client orders or providing other [[investment services]] in commodity products to their customers or suppliers, an further provided that: | ||
*taken together this activity is an ancillary to their main business at a group level, | *taken together this activity is an ancillary to their main business at a group level, | ||
*that main business is not providing banking or [[ | *that main business is not providing banking or [[investment services]], or acting as a [[market-maker]] in [[commodity derivatives]] | ||
*they are not using high-frequency trading algorithms; [[and]] | *they are not using high-frequency trading algorithms; [[and]] | ||
*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”;}} | ||