Energy firms concerned by Mifid II ‘ability test’
The definition of a financial instrument under Mifid II and the structure of two key exemptions are worrying energy trading firms such as utilities
The status of physical energy forwards under Europe’s Mifid II legislation, and the introduction of an ‘ability test’ to determine whether contracts must be physically settled, are causing concern among energy trading firms seeking to avoid onerous financial rules.
The introduction of the test, which first appeared in technical advice from the European Securities and Markets Authority (Esma) in December last year, is one of many aspects of Mifid II’s definition of a financial instrument that are
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