Financial Market
The EU legislative process - symptoms of anarchy
Thursday, 07 July 2016 14:34


A few annoying facts from a financial lawyer's perspective...


Did the EU financial regulation cause the Brexit?
Wednesday, 29 June 2016 23:26



Why Britons left - competing hypotheses are attacking us in every article. There is no use to object to dominant trends, hence I'll also try to present some propositions in that regard.


Contracts 'that must be physically settled' under MiFID II - the role of balancing agreement with TSOs determined
Wednesday, 22 June 2016 00:00


The ability test for "contracts which must be physically settled" (i.e. contracts falling under Sections C6 or C7 of the Annex I of the MiFID Directive, depending upon the place of execution) has taken its final - as it seems - shape.


Position limits: less than one-day divergence in delivery dates between OTC and an exchange-traded contract will not stop the EEOTC qualification
Monday, 13 June 2016 06:00


Crafting the EU position limits legal framework seems to require an immense creativity along with an extreme caution on the part of European legislators.


Dealing with this unprecedented task reveals problems so far unknown, nevertheless of an utmost practical importance.


"Equivalent" does not always mean the same - remarks on the ground of the new financial instruments' definition
Thursday, 12 May 2016 23:00


Commission Delegated Regulation of 25.4.2016 implementing MiFID II represents the coup de grâce for the hotly-debated topic of equivalency as the criterion for the differentiation of forward contracts being financial instruments from other physically settled OTC derivatives.


This step change from purely formal criterion based on the literal wording of the contract to the objective metric dependent only on verifiable trading data seems, however, as it stands, unworkable for legal practitioners.


Systematic internalisers thresholds for emission allowances and emission derivatives determined in the MiFID II delegated Regulation
Monday, 09 May 2016 00:06


As you certainly know emission allowances and emission derivatives are the asset classes for which - as from the MiFID II entry into force (3 January 2018) - the systematic internalisers' thresholds must be counted.


Numerical values of these thresholds became clear on 25 April 2016.


Inside information on the carbon market - time to build expertise
Monday, 15 February 2016 06:05


I'm sure your company has in place documented systems and procedures to conduct - with due diligence -  assessments, which of your emissions data will have the potential to influence on the market price of carbon (or that the said impact is, for example, negligible).


No? But, obviously, you have already verified whether your company exceeded, at the group level, the threshold of 6 million tonnes of carbon dioxide equivalent a year or a rated thermal input of 2,430 MW. Not true? I don't believe it! 


If, neglecting the above issues, you're counting on the fact that your company is already publishing inside information under the REMIT Regulation, this misunderstanding may have severe consequences.


CCP-cleared trades terminated - not modified (in EMIR reports)
Tuesday, 24 November 2015 06:45


Where an existing contract is subsequently cleared by a CCP, it mustn't be reported under EMIR to the trade repository as a modification of the existing contract, but the original contract should be flagged as terminated and the new contract resulting from clearing should be reported.


This is the essence of ESMA's recent draft amendments with respect to EMIR reporting of derivatives subject to clearing.


It will be also expressly stipulated by the law that when a contract is concluded in a trading venue and cleared on the day of execution, only its cleared form will be reported.


MiFID II position limits regime - be mindful of EEOTC (Economically-Equivalent OTC Contracts)!
Monday, 09 November 2015 06:36



Among multiple issues involved with applying MiFID II position limits the most prominent appears that there is no ex ante certainty on whether contracts are recognised as EEOTC before entering into transactions. 


Risk-reducing transactions more transparent
Monday, 19 October 2015 06:51



Non-financial companies are required to include in their internal policies "measures to ensure" that the risk-reducing transactions serve no other purpose than covering risks directly related to the commercial activities of the non-financial entity, and that any transaction serving a different purpose can be clearly identified.


If they still want to remain non-financials, obviously…


The clock starts ticking to be authorised under MiFID II
Sunday, 11 October 2015 11:43


Overall, when it comes to transitory issues, it is useful to note that for an anciliary activity exemption the clock has started ticking as from July 2015 i.e. well before 2017, which is is the date when MiFID II will enter into force.


It follows, the trading activity executed as from July 2015 must be assessed  against the relevant thresholds.


Hedging - tornado approaches
Monday, 24 August 2015 06:56



Clearing thresholds' calculations are quite complicated - partially on account of requirement to classify all OTC derivatives transactions as hedging or non-hedging (which fatigue applies even to the smallest counterparties).


There is a chance, in the foreseeable future the companies' procedures setting the company's position versus clearing threshold may become simpler, but this novelty unnecessarily would mean less regulatory burden.


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