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You must have a taste for multi-dimensional chess if you want to understand what is required in the world of [[commodities]], freight, weather derivatives and [[emission allowances]]. To wit: | You must have a taste for multi-dimensional chess if you want to understand what is required in the world of [[commodities]], freight, weather derivatives and [[emission allowances]]. To wit: | ||
Section C of Annex I to [[MiFID]] includes the following emissions and commodity products as within the scope for [[Financial instrument|financial instruments]]: | |||
{{quote|{{MIFID commodity financial instruments}} }} | |||
===In scope=== | ===In scope=== | ||
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==={{strike|Out of...|''In''}} scope=== | ==={{strike|Out of...|''In''}} scope=== | ||
*[[Physically-settled]] [[commodity derivatives]] which would otherwise be out of scope, if not used “for commercial purposes” and having “the characteristics of [[derivative]] [[financial instruments]]” are ''in'' scope. | *'''[[Physically-settled]] [[commodity derivatives]]''' which (per below) would otherwise be out of scope, if not used “for commercial purposes” and having “the characteristics of [[derivative]] [[financial instruments]]” are ''in'' scope. That one had you going didn’t it! | ||
===''Really'' out of scope=== | ===''Really'' out of scope=== | ||
*'''Actual [[commodities]]''', being consumable, perishable, paint ’em yellow ’n’ pass ’em off as copper, real-world things that people actually need to live, are ''out'' of scope. | *'''Actual [[commodities]]''', being consumable, perishable, paint ’em yellow ’n’ pass ’em off as copper, real-world things that people actually need to live, are ''out'' of scope. | ||
*'''[[Physically-settled]] [[commodity derivatives]]''' are ''out'' of scope ... ''unless'' they are traded on an EU [[trading venue]], (i.e, [[OTC]] [[physically-settled]] [[commodity derivatives]]) in which case they are in scope ... unless they are “wholesale energy products traded on an OTF that must be physically settled” | *'''[[Physically-settled]] [[commodity derivatives]]''' (not falling into the no-man’s land bucket above) are ''out'' of scope ... | ||
:... ''unless'' they are traded on an EU [[trading venue]], (i.e, [[OTC]] [[physically-settled]] [[commodity derivatives]]) in which case they are ''in'' scope ... | |||
:: ... unless they are “wholesale energy products traded on an OTF that must be physically settled” — which case they are ''out'' of scope again. I DON’T MAKE THE RULES FOLKS. |