ESMA asks Commission to clarify ancillary activity test under MiFID II

On 10th April 2018, the European Securities and Markets Authority (ESMA) wrote a letter to the European Commission regarding the exemption from authorisation as investment firm which non-financial entities are eligible for when their commodity derivative trading activity is ancillary to their main business as set out in Directive 2014/65/EU on markets in financial instruments (MiFID II).

In its letter, ESMA invited the Commission to provide further guidance on how the ancillary activity criteria set out in Article 2(4) of MiFID II, and further specified in RTS 20, are to be interpreted and implemented, and more specifically at which level the ancillary tests should be performed.