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There is some angst around weather (inadvertently or on purpose) end-users buying emissions allowances or commodity derivatives for their own purposes might be required to be authorised under MiFID 2. After some scrambling around, ESMA derived a [[de minimis threshold test]], meaning to keep those who weren’t executing customer orders and whose net exposure was under three billion annually, out of scope. | There is some angst around weather (inadvertently or on purpose) end-users buying [[emissions allowances]] or in-scope [[commodity derivatives]] for their own purposes might be required to be authorised under MiFID 2 due to the revised definition of [[dealing on own account]]. After some scrambling around, [[ESMA]] derived a [[de minimis threshold test]], meaning to keep those who weren’t executing customer orders and whose net exposure was under three billion annually, out of scope. | ||
The definition of net exposure was perhaps too hastily drawn up, as it appears to reference only instruments that would be in scope for [[MiFID]], and even then is a bit slapdash about it — commodities have a complicated relationship with MiFID, and it doesn’t make for casual cross reference — but logically it shouldn’t matter whether a contract is in or out of scope for MiFID, as long as it operates to reduce net exposure. | |||