Companies trading EU commodities are set to get more options to avoid extra costs linked to the EU’s MiFID 2 financial rules that apply from 2018.
The European Commission has proposed allowing companies to use an optional capital employed test to show that trading commodity derivatives is not their main business, and so they do not need a MiFID 2 license. This would help companies with large infrastructure assets, for example, to avoid being treated like banks and so avoid higher capital requirements. Companies would have to carry out the first tests in 2018, based on data from 2015 to 2017. Siobhan Hall explains how it works and what happens next.