The general approach under the Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (MiFID I) consisted in excluding emission allowances from the scope of financial instruments, but capturing derivative contracts based on such allowances (with the exception of Romania, where EUA’s were already classified as financial instruments). 4. in the FCA's view an emission allowance (including when auctioned under the Auctioning Regulation) will not come within C1. But for 14 elements of the package, the the European Commission is mandated to adopt rules directly, with ESMA providing advice only – the so-called delegated acts. Delegated acts are drafted and made by the European Commission, after receiving advice from the ESMA. Pursuant to the European Commission’s Report of 18 November 2015 on the functioning of the European carbon market (COM(2015) 576 final. 2 July 2014: - MiFID II: Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.06.2014, p. 349). 1. ensuring greater transparency: introduction of a pre- and post-trade transparency regime for non-equities and strengthening and broadening of the existing equities trade transparency regime; 2. bringing more trading onto regulated venues: creation of a new category of platforms to trade derivatives and bonds - the organised trading facilities (OTFs) - and of a trading obligation for shares on regulated venues; 3. fulfilling the Union's G20 commitments on derivatives: - mandatory trading of derivatives on regulated venues. The final legislative texts of MiFID II and MiFIR were approved by the European Parliament on 15 April 2014 and by the European Council on 13 May 2014. - specific MiFID II exemption for EU ETS operators (applicable to emission spot market), and. European Economic Area (EEA) - As of October 2017, the EEA consists of the following countries: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. In accordance with these requirements, IBUK has implemented a new section in Account Management and new features in the IB Trader Workstation to allow Investment Firms that report their transactions through IBUK to identify individuals and algorithms in compliance with the new obligations. 2. the five-day future auction product is a financial instrument and is regulated under MiFID, it is included under Sections C4 and C11 of the Annex I to the MiFID II. UK Financial Conduct Authority (FCA) in the document Markets in Financial Instruments Directive II Implementation – Consultation Paper I (CP15/43), December 2015 (p. 267, 268) observes emission allowances under the MiFID II are covered in four, sometimes overlapping, ways: 1. Copyright © 2009 - 2020 Michal Glowacki. The prominent effect of the described regulatory U-turn is the professional intermediaries in spot emissions trading have to apply for the MiFID licence. The identifier can be a passport, a national ID card, a tax or personal code or a concatenation of full name and date of birth (“CONCAT”). - broadening the definition of investment firm to capture firms trading commodity derivatives as a financial activity; 4. facilitating access to capital for SMEs: introduction of the SME Growth Market label; 5. strengthening the protection of investors: enhancement of the rules on inducements, a ban on inducements for independent advice and new product governance rules; 6. regulating high-frequency trading (HFT) imposing requirements on trading venues and on firms using HFT; 7. introducing provisions on non-discriminatory access to trading and post-trading services in trading of financial instruments notably for exchange-traded derivatives. A transaction is considered to be executed when it resulted from one of the following activities performed by an Investment Firm: [Ref: Articles 2 and 3 of Commission Delegated Regulation (EU) 2017/590]. RTS 15 on clearing access in respect of trading venues and central counterparties –Articles 15, 16, 17, 19 and 20 will apply from 20 April 2017. Only one individual or algorithm can be identified as responsible with regard to a transaction, and Investment Firms must identify such individual or algorithm as specified in Article 8 of commission delegated regulation (EU) 2017/590. ESMA Guidelines are subject to the ‘comply or explain’ process in Article 16 of the said Regulation 1095/2010 and are addressed to competent authorities or, as the case may be, market participants. Financial Instruments Covered by MiFIR - Article 26 (2) of Regulation (EU) No 600/2014 (MiFIR) lays out the transaction reporting obligation with regard to transactions in financial instruments listed below, irrespective of whether or not such transactions are carried out on the trading venue: The financial instruments covered by this requirement are legally enumerated in Section C of MiFID II: - implementing technical standards (ITS). Similarly, EEA Investment Firms that use the IB platform for their clients’ orders and have elected to transaction report through IBUK will have to use the same identifiers for their client orders. An investment firm transmitting an order pursuant to Article 26(4) of Regulation (EU) No 600/2014 (transmitting firm) shall be deemed to have transmitted that order only if the following conditions are met: (a) the order was received from its client or results from its decision to acquire or dispose of a specific financial instrument in accordance with a discretionary mandate provided to it by one or more clients; (b) the transmitting firm has transmitted the order details referred to in paragraph 2 to another investment firm (receiving firm); (c) the receiving firm is subject to Article 26(1) of Regulation (EU) No 600/2014 and agrees either to report the transaction resulting from the order concerned or to transmit the order details in accordance with this Article to another investment firm. The information requested for these accounts is: Note: For a listing of common MiFIR definitions and terms, see KB2980. Oversight in the primary market will continue to be covered by the Auctioning Regulation, other than issues related to market abuse, where the Market Abuse Regulation (MAR) will be directly applicable. These include new requirements on best execution and research received by asset managers from banks. Your country of citizenship - is the country you are a citizen of = if you are a Filipino citizen - then what is the question - you don't live in the Phillipines? - introduction of position limits and MiFID reporting requirements for commodity derivatives. Article 4 of commission delegated regulation (EU) 2017/590 - Transmission of an order. The above Report of November 2015 refers, moreover, to some pieces of financial market legislation that will apply to the carbon market by virtue of cross-references to MiFID II definitions of financial instruments. Margin Requirement on Leveraged ETF Products, China Connect Northbound Investor ID Model. Under the MiFID II approach, however, the scope of the EU financial markets legislation has been extended to apply to the spot segment of the carbon market. Commodity Derivatives Transactions that reduce risk in an objectively measurable way - When reporting transactions in commodity derivatives, IBUK will have to specify whether the transaction reduces risk in an objectively measurable way in accordance with Article 57 of Directive 2014/65/EU (“Art 57”). NOTE: THE INFORMATION ABOVE IS NOT INTENDED TO BE A COMPREHENSIVE OR EXHAUSTIVE GUIDANCE AND IT IS NOT A DEFINITIVE INTERPRETATION OF THE REGULATION, BUT A SUMMARY OF MiFIR TRANSACTION REPORTING OBLIGATIONS. - MiFIR: Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.06.2014, p. 84). The legislative process for 1-year delay has been finalised: - as regards MiFID II - with the adoption of the Directive (EU) 2016/1034 of the European Parliament and of the Council of 23 June 2016 amending Directive 2014/65/EU on markets in financial instruments. (11) Emission allowances consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme). Legal Entity Identifiers (“LEI”) = 20-character unique identifier based on the ISO 17442 for the global identification of legal entities that engage in financial transactions. Accounts that trade in financial instruments carried by Interactive Brokers (U.K.) Limited (“IBUK”) will need to be identified in IBUK’s reports by using specific identifiers that may or may not be already available to IBUK. Financial instruments where the underlying is an index or a basket composed of financial instruments traded on a trading venue. IBUK will allow such transactions only from accounts held by entities that are non-financial entities using the account for trades in commodity derivatives that are intended to objectively reduce risk directly relating to their commercial activity in accordance with Art 57. Reception or transmission of orders in relation to one or more financial instruments (exceptions apply under Article 4 of Commission Delegated Regulation (EU) 2017/590); Execution of orders on behalf of clients; Making an investment decision in accordance with a discretionary mandate given by a client; Transfer of financial instruments to or from accounts.