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ARTICLE · 21 OCTOBER 2014

MiFID II: Commodity Derivatives And Emissions

A&O Shearman
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MiFID II is the latest piece in a package of European and global reforms impacting commodity derivatives and emissions traders.

European UnionFinance and Banking
John Adams
John Adams
Thomas Donegan
Thomas Donegan
William Murdie
William Murdie
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MiFID II is the latest piece in a package of European and global reforms impacting commodity derivatives and emissions traders, drawn up in response to concerns as to excessive speculation and volatility in the commodities markets and the integrity of emissions trading.

Introduction

This memorandum discusses commodity derivatives and emissions under the new Markets in Financial Instruments Directive ("MiFID II")1 and the Markets in Financial Instruments Regulation ("MiFIR").2 It is one in a series of client notes that will discuss the changes that the revision of the original MiFID will bring about from 3 January 2017.

Commodities and emissions trading firms will need to reassess whether they are now within scope as existing exemptions are significantly narrowed by MiFID II. A wider range of products, including emissions allowances, will also fall within the scope of financial instruments regulated under MiFID II. Hard position limits – which can apply to

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