Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I have had no representation from people in the industry on expanding or watering down MiFID but there may have been representations to my Department. If Deputy Doherty tables a parliamentary question for written answer, I will make sure it is answered adequately.

The best way to reply to all three Deputies is to give a short summary of the current Council text. It states:

First, more products will be defined as derivative financial instruments as compared to MiFID I and will, therefore, fall within the scope of MiFID II and other financial legislation such as market abuse.


Second, MiFID II narrows down exemptions as compared to MiFID I. This means that many commodity firms will fall within the scope of the legislation and will have to comply with all MiFID II provisions.


Third, MiFID II also contains position management position limits and product intervention provisions in respect of all financial instruments, including commodity derivatives, as tools to avoid excessive speculation in commodities.

The current Council text of MiFID II proposals places position limits at the centre of position management and requires limits to be imposed as part of the position management regime for commodity derivatives. Competent authorities will be obligated to establish and apply position limits on the size of a position on a commodity derivative which a person can have over a specified period of time. Investment firms and market operators operating a trading venue which trades commodity derivatives will also have to apply position management controls. Furthermore, competent authorities will have product intervention powers whereby they may prohibit or restrict trading on financial instruments or prohibit or restrict investment activities when there is a threat to the orderly functioning and integrity of financial markets or commodity markets.

The European Securities and Markets Authority will have contingency and co-ordinated powers in position management and product intervention to ensure consistent application across all member states. In the exercise of its powers, ESMA will also have to consult public bodies competent for the oversight, administration and regulation of physical agricultural markets. Moreover, entities and persons otherwise exempt from MiFID II will still have to comply with position limits and position management provisions.

It meets many of the Deputy's requirements. In terms of the Irish Presidency, we are committed to advancing it as a priority and we think we will have it substantially advanced in the last weeks of our Presidency, but it may not be fully in place. However, I think we will have taken it beyond the point of no return.

See this speech in context