On 9 July 2021, the HM Treasury issued a consultation on its wholesale markets review, this included specific proposals to reform the MiFID commodity derivatives position limits regime.

• Consultation proposes changes that would limit the scope of position limits to agricultural contracts and physically settled contracts, FCA supports these proposals.
• FCA states while change being considered, it will not take supervisory or enforcement action re commodity derivative positions that exceed position limits on cash-settled commodity derivatives contracts, unless the underlying is an agricultural commodity.
• Will keep this position under review, will reconsider if any indications of market abuse.

Qualifications

• Statement does not apply to physically deliverable or agricultural commodity derivative contracts, or where underlying is agricultural commodity, existing approach remains.
• Does not affect responsibilities on members or participants of a trading venue under the position management of that venue, firms must apply market conduct obligations.