MiFID Ancillary Activity Exemption – Last Minute checks

Entities trading in derivatives need to finish their calculations by the end of the month; here are a few tips for last-minute checks and submission of declarations.
 
-> sense check: have the numbers varied unexpectedly from previous years? Is the variation explained by increased/decreased activity or variation in prices?
 
If the numbers seem wrong, or if you want to check the calculations:
 
-> transactions for hedging (objectively mitigating risks) are excluded from the calculations: check how they are identified in your system/spreadsheet and if they feed correctly - flag your hedging transactions in a format that is easily exportable to your calculation system
 
-> Netting: make sure that your transactions net correctly and make sure that the identification of the underlying commodity, contract type and maturity feed correctly to your calculation system

-> Have you excluded transactions that serve liquidity on a trading venue? flag those transactions in a format that is easily exportable to your calculation  system
 
-> If you trade Gas & Power, remember that the EU REMIT products traded on an OTF (like Trayport) are excluded, BUT EU activity only, UK activity is outside the exemption after Brexit: Same as above, check how these transactions are identified in your system and if it feeds correctly - for next year, flag them in a format that is easily exportable to your calculation system
 
UK: Requires notification to the FCA; remember that this needs to be done online – remember where you stored your password! If it is the first time that you notify, remember to register! Link to the page in the post
 
EU: Does not require a notification anymore BUT remember to document the calculations, you still need to prove that you did them for the current calculation period!
 
Remember that EMIR is around the corner! When you look at your data, have in mind that it will have to work for both calculations! June is the deadline; mark it in your calendar!
 
If you need any help with your MiFID calculations, how to implement them, or your EMIR calculations, we are here to help; please contact us at info@sybiusconsulting.com