The “Market in Financial Instruments Directive” (MiFID ) is currently being revised and will be final adopted as so-called “MiFID II” by the European Parliament later this or next month.
The definition of the term “financial instrument” is expected to be extended . For example, according to the draft, emission allowances will be classified as financial instruments . In addition, basically all physically settled commodity derivatives that are not stipulated bilaterally will be classified as financial instruments, with the exception of certain electricity, gas , coal and oil contracts.
According to the draft the current exemption for commodity traders will be deleted (Article 2 para 1 lit. k). This exemption currently allows to carry out certain trading activities in commodities derivatives without a license. Further, the so-called ” ancillary activity ex-cemption”, which is also used by commodity traders will be extensively revised and is likely to be rather limited in its application (Article 2 para 1 lit. i). For example, investment services will be allowed to be performed only for customers or suppliers of commodity traders which want to make use of the exemption. In addition, these investment services may only relate to commodity derivatives , emission allowances or derivatives thereof.
As a consequence, according to the current MiFID II draft, activities carried out by commodity traders without a license may be subject to a license requirement from 2017 on. Although not yet all the details of future regulation have been clarified, it makes sense to analyze in time the trading, advising and portfolio management activities in relation to a possible future license requirement.