EU · MiFID II · TITLE I SCOPE AND DEFINITIONS
Article 2 MiFID IIExemptions
Lists the persons outside MiFID II, including insurers, intra-group service providers, professionals providing incidental services, certain own-account dealers, funds and their managers, central banks and public debt managers, CSDs and crowdfunding providers, and commodity traders whose trading is ancillary to their main business at group level. Paragraph 4 sets the criteria for the ancillary-activity delegated act, including an EUR 3 billion net outstanding notional threshold for cash-settled commodity derivatives traded OTC.
Amendments and application dates
| Amending act | Change | Applies from |
|---|---|---|
| Directive (EU) 2020/1504 | Text inserted | by 10 Nov 2021 |
| Directive (EU) 2021/338 | Text amended | by 28 Feb 2022 |
| Regulation (EU) No 909/2014 | Text amended | by 1 Jan 2023 |
| Directive (EU) 2024/790 | Text amended | 29 Sept 2025 |
Level 2: delegated and implementing acts
- Delegated actIn forceLegal basis
AI summarySpecifies, at group level, when trading in commodity derivatives, emission allowances and derivatives thereof is ancillary to the main business for the exemption in Article 2(1)(j) MiFID II, through a de minimis threshold test and either a trading test or a capital employed test, with rules on calculation and risk-reducing transactions. Replaced the earlier RTS 20 (Delegated Regulation 2017/592).
- Delegated actIn forceLegal basis
AI summaryThe main MiFID II Delegated Regulation: defines key terms (such as investment advice, systematic internaliser, algorithmic and high-frequency trading, and direct electronic access) and sets detailed organisational requirements and operating conditions for investment firms, including compliance, conflicts of interest, remuneration, client information, suitability and appropriateness, best execution, client order handling, reporting to clients, record keeping and transaction-level obligations.
- RTSReplaced (historical)Legal basis
AI summaryFormer RTS 20 setting the overall market threshold and main business threshold tests used to decide whether commodity derivative activity was ancillary to a group's main business for the MiFID II exemption. Repealed and replaced by Delegated Regulation 2021/1833; valid until 8 November 2021.
Level 3: ESMA Q&As, guidelines and opinions
- Q&AAnsweredESMA rulebook
AI summaryFinancial Transmission Rights are C(10) financial instruments when traded on the secondary market, including off venue, so MiFID II applies to secondary trading platforms for them; FTRs in the primary market entered into with or by a transmission system operator are excluded.
- Q&ARejectedInferred · 80%
AI summaryAsked how the exemptions in Article 2(1)(c) (incidental services in a regulated profession) and Article 2(1)(k) MiFID II should be interpreted. ESMA rejected the question, so there is no answer.
- Q&AAnsweredESMA rulebook
AI summaryIn a Commission answer, a person whose main business is executing client orders in C6 carve-out wholesale energy products traded on an OTF cannot use the ancillary-activity exemption, because the main business must be a commercial activity involving commodities; it needs authorisation to provide investment services in commodity derivatives.
- Q&AAnsweredInferred · 90%
AI summaryA firm whose commodity trading is no longer ancillary to its main business, based on the annual calculation done in the first quarter of the year, must apply for authorisation as an investment firm as soon as reasonably practicable.
- Q&AAnsweredInferred · 85%
AI summaryThe capital employed test for the ancillary-activity exemption in Article 5(4) of Delegated Regulation 2021/1833 uses the group's consolidated accounts (total assets minus short-term debt) and capital employed worldwide, not only in the EU.
- Q&AAnsweredExplicit reference · 90%
AI summaryLiquidity provision transactions are 'privileged transactions' excluded from the ancillary-activity calculation under Article 2(4)(c) MiFID II where the obligation to provide liquidity is imposed by a regulator under EU or national law or by a trading venue; only the transactions under the programme are excluded, not the liquidity provider itself.
- Q&AAnsweredInferred · 85%
AI summaryThird-country firms, including third-country subsidiaries of EU firms, dealing in commodity derivatives or emission allowances on EU venues are outside the ancillary-activity test in Delegated Regulation 2021/1833 and need not notify any EU authority or ESMA that they use the exemption.
- Q&AAnsweredInferred · 85%
AI summaryThe simplified capital test in Delegated Regulation 2021/1833 (for the ancillary-activity exemption) is self-contained: it reproduces the relevant parts of CRR Articles 357 and 360, so firms need not apply the rest of the CRR commodity provisions, though EBA guidance on net and gross positions may help.
- Q&AAnsweredExplicit reference · 90%
AI summaryOnly Tier 1 DEA clients, who obtain the use of a member's trading code directly, have direct electronic access and so lose the own-account dealing exemption in Article 2(1)(d) MiFID II; Tier 2 clients using sub-delegated access do not hold the code and can still rely on the exemption.
- Q&AAnsweredInferred · 85%
AI summaryC(10) commodity derivatives count towards the ancillary-activity test only if their underlyings fall within the position limits regime; other C(10) contracts are excluded, so the category is treated consistently across the MiFID II commodity provisions.
- Q&AAnsweredInferred · 75%
AI summaryFirms must check at least monthly whether they meet the HFT criteria in Article 19 of Delegated Regulation 2017/565, using message-rate estimates venues must provide on request; an unauthorised firm using HFT must seek authorisation immediately, and any algorithmic trader must notify its home authority and those of the venues it trades on.
- Q&AAnsweredExplicit reference · 90%
AI summaryThe references to market makers in the exemptions in Article 2(1)(d)(i) and 2(1)(j) MiFID II cover both firms with a market making agreement under Article 17(4) and other market makers within Article 4(1)(7).
- Q&AAnsweredInferred · 90%
AI summaryThe ancillary-activity exemption in Article 2(1)(j) MiFID II applies only where the group's main business, taken as a whole, is not investment services or banking, so every entity in a financial group that deals in commodity derivatives must be authorised as an investment firm.
- Q&AAnsweredInferred · 85%
AI summaryFor the ancillary-activity thresholds, C6 contracts that were financial instruments under MiFID I count throughout the calculation period, as OTC until 3 January 2018 and as OTF trades afterwards; this also applies to coal and oil C6 contracts, while REMIT wholesale energy products are treated differently.
- OpinionPublishedESMA rulebook
AI summaryESMA opinion (ESMA70-156-478) publishing its 2020 estimates of the size of the EU market in each commodity derivative asset class (on-venue and OTC), used by firms as the denominator of the overall market threshold test for the MiFID II ancillary-activity exemption under former RTS 20 (Delegated Regulation 2017/592), since replaced.
- Q&ALegacy Q&A documentESMA rulebook
AI summaryESMA's consolidated legacy Q&A document (ESMA70-872942901-36, last updated 23 September 2022) on commodity derivatives under MiFID II and MiFIR, covering position limits, the ancillary activity exemption, position reporting, position management controls and third-country issues. It is no longer updated; later Q&As are in ESMA's Q&A tool.
- Q&ALegacy Q&A documentESMA rulebook
AI summaryESMA's consolidated legacy Q&A document (ESMA70-872942901-38, final version 13 October 2023) on market structure topics, covering data disaggregation, direct electronic access and algorithmic trading, the tick size regime, multilateral and bilateral systems (including OTFs and systematic internalisers) and access to CCPs and trading venues. It is no longer updated; later Q&As are in ESMA's Q&A tool.
Commentary
No law-firm commentary is linked to this provision yet.
393 more documents relate to MiFID II as a whole without naming an article.
UK counterpart
- MAR 7A.1.2R · What?DivergedExplicit reference · 90%
EU changes after exit: Directive (EU) 2020/1504 (by 10 Nov 2021), Directive (EU) 2021/338 (by 28 Feb 2022), Regulation (EU) No 909/2014 (by 1 Jan 2023), Directive (EU) 2024/790 (from 29 Sept 2025).
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Version history
- From 28 Mar 2024
- From 28 Feb 2022 to 28 Mar 2024
- From 10 Nov 2021 to 28 Feb 2022
- From 1 Jul 2016 to 10 Nov 2021
- From 17 Sept 2014 to 1 Jul 2016
Each entry is a consolidated version of the act on EUR-Lex in which this provision appears. The text itself is on the official site.