European Union Continues Work on Position Limits for Commodity Derivatives: An Overview and Update on the EU’s Position Limits on Commodity Derivatives Under MiFID II

Sullivan & Cromwell LLP - June 13, 2016

On May 2, 2016, the European Securities and Markets Authority (“ESMA”) published a revised version of its draft regulatory technical standards that will guide the competent national regulatory authorities in European Union (“EU”) member states that are required to implement the commodity derivatives positon limits requirements of the Markets in Financial Instruments Directive (“MiFID II”).  Revised draft Regulatory Technical Standard 21 (“RTS 21”), which ESMA originally submitted to the European Commission (the “Commission”) for review and comment on September 28, 2015, incorporates and responds to the comments of the Commission to provide a methodology for calculating the position limit levels that will apply to (i) commodity derivatives traded on trading venues and (ii) economically equivalent OTC contracts in the EU.