Along with the main business testthe market share test (sometimes called also OMT - Overall Market Threshold or Market Size Test) was used for the determination whether the entity qualified for the MiFID II ancillary activity exemption.


The purpose of the market share test was to determine whether the persons within the group were large participants relative to the size of the financial market in that asset class and as a consequence should be required to obtain authorisation as an investment firm.


The details of the test were stipulated in Article 2 of the Commission Delegated Regulation (EU) 2017/592 of 1 December 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the criteria to establish when an activity is considered to be ancillary to the main business (ESMA's RTS 20). 

Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending Directive 2014/65/EU as regards information requirements, product governance and position limits, and Directives 2013/36/EU and (EU) 2019/878 as regards their application to investment firms, to help the recovery from the COVID-19 pandemic substantially modified legal framework regarding MiFID ancillary exemption.

The said Directive set out new provisions regarding the ancillary activity tests and empowered the European Commission to adopt a delegated act specifying the relevant criteria.

This delegation was exercised by adoption of the Commission Delegated Regulation (EU) 2021/1833 of 14 July 2021 supplementing MiFID II by specifying the criteria for establishing when an activity is to be considered to be ancillary to the main business at group level - which repealed the Commission Delegated Regulation (EU) 2017/592.


According to the Regulation of 14 July 2021 the "Overall Market Test has been removed as the commodity derivatives landscape in the Union has changed to such an extent that the Overall Market Test would render entities no longer eligible to the ancillary activity exemption even with no change to their business conduct" (Recital 18).


Also market participants in the course of consultations assessed the Market Size Test as overly complex and as a significant burden during the crisis.


Also, it was considered a red-tape requirement as it did not alter the status quo in terms of non-financial firms that were eligible for the exemption.


This modification is not reflected in the remainder of this article, which depicts the rules of the Market Size Test as it stood under previous provisions of the Commission Delegated Regulation (EU) 2017/592 of 1 December 2016.



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