MiFID2: EU Commission adopts RTS 20 and 21

RTS 20 specify criteria for establishing when an activity is to be considered ancillary to the main business of a group. On 30 May 2016 the European Securities and Markets Authority (ESMA) submitted to the Commission a formal opinion and a revised set of RTS following a notification from the Commission of its intention to endorse the draft RTS originally submitted on 28 September 2015 subject to a number of changes. In particular, the RTS adopted by the Commission set out the chosen options for:

• the numerator, which will be based on the simplified capital requirements regulation (CRR) method;
   
• the denominator, which will be based on the capital employed measure; and
   
• applicable threshold, which will remain a 10% threshold.

In order to address legal uncertainty that would arise for those non-financial groups that do not have a complete and representative set of data covering their main and ancillary activities, a calculation period of three years will be introduced.

RTS 21 set out the basis of the methodology that ESMA will use for the calculation and application of position limits in order to establish a harmonised position limits regime across commodity derivatives trading on trading venues and economically equivalent OTC (EEOTC) contracts.

Both sets of RTS are subject to scrutiny by the EU Parliament and EU Council.