On October 1, the United Kingdom’s (UK) Financial Conduct Authority (FCA) published a statement on trade reporting and position limit obligations under the Markets in Financial Instruments Regulation (MiFIR) (the Statement).
The Statement is in response to the recent statement issued by the European Securities and Markets Authority (ESMA) stating that it intends to assess UK trading venues in relation to its opinions on MiFIR trade reporting and commodity derivatives position limits.
If the assessments are positive, UK trading venues will be added to the list of venues with a positive or partially positive assessment in respect of those opinions with effect from the end of the European Union (EU) withdrawal transition period on December 31.
The ESMA statement means that EU investment firms trading on the UK venues would not be required to publish the details of those transactions through an Approved Publication Arrangement (APA) in the EU. Commodity derivatives traded on UK venues would also not be considered as economically equivalent Over-the-Counter (OTC) contracts counting towards the EU’s commodity derivatives position limits regime.
In the Statement, the FCA confirms its position that it does not require UK investment firms trading on venues outside of the UK, in the EU or elsewhere, to publish the details of those transactions through a UK APA.
The FCA also confirms it does not consider commodity derivative contracts traded on trading venues within the EU or elsewhere, as economically equivalent OTC contracts and therefore, such contracts do not count towards the UK’s commodity derivatives position limit regime.
The FCA adds that it does not maintain a list of assessed overseas venues for these purposes.
The Statement is available here.