The European Securities and Markets Authority (ESMA) has published nine opinions on position limits regarding commodity derivatives under the Markets in Financial Instruments Directive and Regulation (MiFID II/MIFIR).
ESMA’s opinions agree nine position limits proposed by the Financial Conduct Authority (FCA). The position limits concern contracts on, among other products, London cocoa and Robusta coffee.
ESMA found that the proposed position limits by the FCA are consistent with the objectives established in MiFID II and with the methodology developed for setting those limits.
As of 3 January 2018 and MiFID II application, limits will apply to the net position a person can hold in commodity derivative contracts.
NCAs have to set position limits for commodity derivatives and notify ESMA of the specific position limits they plan to introduce for liquid contracts.
ESMA is also publishing a list of liquid contracts that will receive a bespoke position limit and it will continue to assess the notifications received and issue opinions in order to ensure that the position limits are set in accordance with the MiFID II framework.