Europex’ announcement about the entry into application of the revised Markets in Financial Instruments Directive (MiFID II) and its accompanying Regulation (MiFIR) marks a major milestone in European energy commodity trading.
The great majority of gas and electricity derivative contracts as well as all EU ETS emission allowances are now classified as financial instruments – along with all other commodity derivatives. New rules for market venues, like energy exchanges, where these financial instruments are traded, apply along with numerous other changes affecting market participants and market infrastructure providers.
From the beginning, Europex and its members have accompanied the legislative and implementation process of MiFID II / MiFIR with great attention. However, Europex’ initial call to keep the general commodity exemption of MiFID I in place, arguing that energy trading had not been at the origin of the financial crisis in 2007/2008 and mostly serves hedging purposes for the industrial value chain, had been rejected.
Today’s entry into application of MiFID II / MiFIR represents the long-prepared start of a new journey of energy commodity trading as an integral part of the financial services legislation in Europe, shared the association of European Energy Exchanges.