In a May 31 letter, the Vice President of the European Commission (EC), Valdis Dombrovskis, provided confirmation to the Chair of the European Securities and Markets Authority (ESMA) regarding the test to apply the ancillary activity exemption under Article 2(1)(j) of the revised Markets in Financial Instruments Directive (MiFID II).

In April 2018, ESMA had sought clarification on whether to assess ancillary activity at a group level or at a single entity level (for more information, see the Corporate & Financial Weekly Digest edition of April 13, 2018). The letter confirms that the test should be applied at a single entity level (i.e., it must be calculated as many times as necessary for each entity who trades in commodity derivatives within a group).

The letter is available here.