Final Report on amendments to technical standards for commodity derivatives

16 December 2024 ESMA74-2134169708-7577 Final Report On the amendments to certain technical standards for commodity derivatives

1 Table of Contents 1 Executive Summary........................................................................................................ 3 2 Introduction ..................................................................................................................... 5 3 Amendments related to position management controls................................................. 6 3.1 Proposal in the CP................................................................................................... 6 3.2 Feedback from consultation .................................................................................... 7 3.3 ESMA’s assessment and next steps....................................................................... 8 4 Amendments related to position reporting ................................................................... 10 4.1 Proposal in the CP................................................................................................. 10 4.2 Feedback from consultation .................................................................................. 11 4.3 ESMA’s assessment and next steps..................................................................... 12 5 Annexes ........................................................................................................................ 14 5.1 Annex I – Feedback from the consultation............................................................ 14 5.2 Annex II – Draft technical standards ..................................................................... 17 5.2.1 Amendments to the RTS on position management controls......................... 17 5.2.2 Amendments to ITS 4 .................................................................................... 20 5.2.3 Technical Advice on position reporting (Art. 83 of CDR 2017/565) .............. 30

2 List of abbreviations and legal acts CDR Commission Delegated Regulation CP Consultation Paper ESMA European Securities and Markets Authority FR Final Report GLEIF Global Legal Entity Identifier Foundation ITS Implementing Technical Standards JSON Java Script Object Notation LEI Legal Entity Identifier NCA National Competent Authority MiFID II Markets in Financial Instruments Directive II MMBTU Million British Thermal Units MWh Megawatt Hour Q&A Question and Answer RTS Regulatory Technical Standards Thm Therms XML Extensible Markup Language

3 1 Executive Summary Reasons for publication On 28 February 2024, the European Parliament and the Council adopted Directive (EU) 2024/790 amending Directive 2014/65/EU on markets in financial instruments (the amending Directive). Directive (EU) 2014/790 was published in the Official Journal on 8 March 2024 and the new provisions will start applying by 29 September 2025, after transposition into national law by Member States. The amending Directive introduces changes to some of the MiFID II provisions regarding commodity derivatives. In particular, the revised Article 57 of MiFID II extends position management controls to trading venues which trade derivatives on emission allowances, while the revised Article 58 of MiFID II amends the scope of position reporting by excluding emission allowances and introduces a new obligation to publish a second weekly position report for trading venues trading options. These changes require the revision of Commission Delegated Regulation (EU) 2022/1299 (RTS on position management controls), Commission Implementing Regulation (EU) 2017/1093 (ITS 4) as well as Article 83 on position reporting in Commission Delegated Regulation (EU) 2017/565 (CDR 2017/565). On 23 May 2024, ESMA published a Consultation Paper presenting the proposed amendments to the MiFID II technical standards for commodity derivatives. ESMA also consulted the Securities and Markets Stakeholders Group. This final report describes the feedback received in the public consultation, ESMA’s reaction to the feedback received, and the final proposal amending the RTS on position management controls, ITS 4 and the technical advice for amending CDR 2017/565. Contents Section 2 presents the overall approach to this final report. Section 3 recalls the approach proposed in the CP and presents the feedback received from the consultation as well as the proposed way forward in relation to the RTS on position management controls. In particular, ESMA proposes to extend the general monitoring obligations as well as the requirements to set, review and report accountability levels to trading venues trading derivatives on emission allowances. Section 4 covers ESMA’s proposed Implementing Technical Standards on the format of position reports (ITS 4) along with ESMA’s proposed Technical Advice on position reporting to the European Commission (Art. 83 of CDR 2017/565). The section reviews the received stakeholder feedback and concludes on the envisaged way forward. The main amendments concern the exclusion of spot emission allowances from position reporting and the new

4 obligation to publish a second weekly position report excluding options in certain circumstances. This Final Report also includes two annexes. Annex I contains the detailed feedback received from respondents and Annex II presents the amended draft technical standards. Next Steps The amended draft technical standards are submitted to the European Commission for adoption. In accordance with Articles 10 and 15 of Regulation (EU) 1095/2010, the European Commission shall decide whether to adopt the technical standards within 3 months.

5 2 Introduction

1. On 28 February 2024, the European Parliament and the Council adopted Directive (EU) 2024/790 amending Directive 2014/65/EU on markets in financial instruments (the amending Directive). Directive (EU) 2014/790 was published in the Official Journal on 8 March 2024 and the new provisions will start applying by 29 September 2025, after transposition into national law by Member States.
2. The amending Directive introduces changes to some of the MiFID II 1 provisions regarding commodity derivatives. In particular, the revised Article 57 of MiFID II extends position management controls to trading venues which trade derivatives on emission allowances, while the revised Article 58 of MiFID II amends the scope of position reporting by excluding emission allowances and introduces a new obligation to report two weekly positions reports2 , one of which excluding options.
3. These changes require the revision of Commission Delegated Regulation (EU) 2022/1299 3 (‘RTS on position management controls’ thereafter), Commission Implementing Regulation (EU) 2017/10934 (‘ITS 4’ thereafter) as well as the article on position reporting in Commission Delegated Regulation (EU) 2017/565 5 (‘CDR 2017/565’ thereafter).
4. On 23 May 2024 ESMA published a Consultation Paper (CP) presenting the proposed amendments to the MiFID II technical standards for commodity derivatives6 .
5. As explained in the CP, the mandates covering the above referenced RTS and ITS have not been amended together with the revision of MiFID II. Therefore, there is no explicit deadline for ESMA to deliver the final proposals for amending the RTS on position management control, ITS 4 and the technical advice on CDR 2017/565 to the European Commission. However, the implementation of the Level 1 amendments relies on specifications to be made in the relevant Level 2 measures. In addition, the changes to ITS 4 require IT developments by trading venues and ESMA. Moreover, contrary to MiFIR, there are no transitional provisions in MiFID II, and all changes to MiFID II will apply by the end of the transposition period, i.e. 29 September 2025 in accordance with Article 2 of the amending Directive. Therefore, ESMA considers it is beneficial to deliver the technical standards as early as possible.
6. Section 3 of the CP deals with the amendments to the RTS on position management controls to include trading venues which trade derivatives on emission allowances in the scope. Section 4 of the CP presents the proposed amendments to ITS 4 and a 1 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) Text with EEA relevance. 2 The obligation to publish two reports concerns only trading venues offering both futures and options when the threshold set out in Article 83 of CDR 2017/565 is met. Trading venues offering only futures will continue to publish only one report. 3 Commission Delegated Regulation (EU) 2022/1299 of 24 March 2022 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the content of position management controls by trading venues. 4 Commission Implementing Regulation (EU) 2017/1093 of 20 June 2017 laying down implementing technical standards with regard to the format of position reports by investment firms and market operators. 5 Article 83 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive. 6 https://www.esma.europa.eu/sites/default/files/2024-05/ESMA74-2134169708-7006_CP_MiFID_review_PMCs_and_ITS4.pdf

6 technical advice to the European Commission to amend CDR 2017/565, related to position reporting, while the draft legal texts are provided in Annex II. 7. Considering that the proposed changes to the RTS on position management controls are a direct consequence of the change in MiFID II and are expected to have a very limited impact on market participants, ESMA deems it disproportionate to carry out a cost-benefit analysis. 8. With respect to ITS 4, most of the changes are a direct consequence of amendments in the legal text and have been carefully developed to minimise the burden on reporting entities. The changes proposed by ESMA on its own initiative are further explained in Section 4.1. 9. ESMA has prepared this Final Report taking into account the feedback received to the CP. In particular, ESMA received responses from 11 stakeholders, ranging from trading venues trading commodity derivatives to trade associations. 3 Amendments related to position management controls 3.1 Proposal in the CP Article 57(8) of MIFID II, second sub-paragraph “ESMA shall develop draft regulatory technical standards to specify the content of position management controls thereby taking into account the characteristics of the trading venues concerned”. 10. As explained in the CP, the amending Directive amends MiFID II by extending the scope of the position management requirements, previously limited to trading venues trading commodity derivatives, to trading venues which trade derivatives on emission allowances. 11. In particular, under Article 57(8) of MiFID II, trading venues trading commodity derivatives and derivatives on emission allowances are required to apply position management controls, which include the following powers: (a) monitor the open interest positions of persons; (b) obtain information, including all relevant documentation, from persons about the size and purpose of a position or exposure entered into, information about beneficial or underlying owners, any concerted arrangements, and any related assets or liabilities in the underlying market, including, where appropriate, positions held in derivatives on emission allowances or positions held in commodity derivatives that are based on the same underlying and that share the same characteristics on other trading venues and in economically equivalent OTC contracts through members and participants;

7 (c) request a person to terminate or reduce a position, on a temporary or permanent basis, and to unilaterally take action to ensure the termination or reduction of the position where the person does not comply with such request; and (d) require a person to provide, on a temporary basis, liquidity back into the market at an agreed price and volume with the express intent of mitigating the effects of a large or dominant position. 12. The second paragraph of Article 57(8) of MiFID II mandates ESMA to develop a draft RTS to specify the content of position management controls, taking into account the characteristics of the trading venues concerned. Those arrangements are specified in the RTS on position management controls which foresees that trading venues should have in place arrangements for the ongoing monitoring of each commodity derivative traded on their trading venues. In information on the nature of the position held in that commodity derivative, taking into account elements such as the frequency and the magnitude of the excess by the same position holder. 13. While the RTS provides flexibility as to the methodology used for setting accountability levels, it also requires trading venues to inform their competent authorities of the methodology used. 14. Furthermore, to ensure that accountability levels remain fit for purpose, the RTS requires trading venues to assess the effectiveness and adequacy of accountability levels on an annual basis and to inform their competent authority, with the same frequency, of the number of instances where accountability levels have been exceeded together with any follow-up actions undertaken. 15. In light of the amendment made to Article 57(8), first sub-paragraph, of MiFID II, ESMA proposed in the CP to extend to trading venues trading derivatives on emission allowances the obligation under Article 1 of the RTS to have arrangements for the ongoing monitoring of derivatives traded on their trading venues. ESMA noted that this would provide for an adequate level of oversight on these contracts and ensure that the objectives underpinning the extended scope of the MiFID II provision are fully met. 16. Similarly, ESMA concluded in the CP that the obligation to set, review and report accountability levels should be extended to trading venues trading derivatives on emission allowances. The rationale behind ESMA’s proposed approach in the CP was that trading venues should have sufficient information on the underlying market of derivatives on emission allowances admitted to trading to set and review accountability levels. In addition, ESMA considered that such an extension of the RTS on position management controls to trading venues trading derivatives on emission allowances would contribute to an increased market oversight in those instruments and lead to a better understanding by trading venues of trading patterns taking place on their platforms. 3.2 Feedback from consultation 17. In the CP, ESMA asked whether stakeholders would agree with ESMA’s proposal to extend the requirements to set, review and report accountability levels to trading

8 venues trading derivatives on emission allowances and invited respondents to provide any other comments. 18. The majority of respondents explicitly supported ESMA’s proposal to extend the requirements to set, review and report accountability levels to trading venues trading derivatives on emission allowances. 19. One respondent explained not to be against the proposal as long as the accountability levels are set at a reasonable level to allow market makers and financing providers to trade derivatives on emission allowances for market making and financing purposes, noting that the onus of monitoring should be on trading venues. 20. One trade association mentioned that these requirements may not offer significant additional value while increasing the administrative burden. 21. One trade association disagreed with ESMA’s proposal and considered that position limits, position management controls and position reporting should only apply to contracts traded on regulated markets cleared by a CCP and not also to emission allowance derivatives traded on MTFs or OTFs as these venues would not be aware of client positions for fungible instruments traded bilaterally or on other venues. Another respondent asked for clarification as to whether the new requirement would only apply to RMs or also capture MTFs and OTFs. 22. Some respondents more generally commented that the MiFID “quick fix” significantly enhanced the efficiency of commodity derivative markets, stressing that the current framework works well and should not be amended beyond what was proposed in the CP. 3.3 ESMA’s assessment and next steps 23. ESMA notes that the majority of respondents supported (or did not object to) the approach put forward in the CP and considered the comments received. 24. Regarding the suggestion to set accountability levels at a reasonable limit, ESMA would first like to note that the responsibility of setting, and ensuring compliance with, accountability levels lies with trading venues. These limits are not aimed at constraining trading, but they rather serve as a tool for trading venues to enhance monitoring of positions on their platforms. In particular, as explained in paragraph 12, accountability levels should act as a potential alarm which may trigger additional actions from the trading venues. 25. It should also be noted that the RTS provides trading venues with flexibility as to the methodology for setting the limits as well as the follow-up actions to be taken towards position holders. 26. With respect to the point raised on the burden for trading venues to set those limits, ESMA notes that such an amended scope of the accountability levels provisions results directly from Article 57(8) of MiFID II which extends position management controls to trading venues trading derivatives on emission allowances. 27. From a practical perspective, ESMA considers that trading venues should have sufficient information on the underlying market of derivatives on emission allowances

9 admitted to trading, which should notably facilitate their task of setting accountability levels. ESMA believes this would benefit the market as a whole by contributing to increased market oversight in those instruments and a better understanding by trading venues of patterns taking place on their platforms. 28. As regards the comments on the scope of the application of the RTS requirements, ESMA notes that Article 57(8) of MiFID II refers to an investment firm or a market operator operating a trading venue without making any distinction between regulated markets, MTFs and OTF. On that basis, ESMA is of the view that position management controls, and the related RTS, should apply to all types of trading venues and not only to regulated markets. 29. Based on the above, and considering the overall feedback to the consultation, ESMA is not introducing any change to the RTS on position management controls presented in the CP.

10 4 Amendments related to position reporting 4.1 Proposal in the CP 30. The revision of MiFID II introduced two changes to Article 58 of MiFID II. The scope of position reporting was amended to exclude emission allowances, and a new obligation was introduced to report a second weekly position report which excludes options. 31. ESMA’s proposals in the CP aimed to reflect those changes in the relevant level 2 instruments: − ITS 4; and − Commission Delegated Regulation (EU) 2017/565 (CDR 2017/565). 32. ESMA took the review of ITS 4 as an occasion to further harmonise the reporting requirements for position quantities in weekly and daily position reports. ESMA proposed that positions in power and natural gas derivatives should be expressed in unit of underlying (e.g. MWh, therm, MMbtu), and that positions on derivatives other than power and natural gas should be expresses in lots. 33. Additionally, ESMA proposed minor drafting changes to the fields “Position holder ID”, “Reporting entity ID” and “Ultimate parent ID” for the purpose of daily reports. 34. Last, ESMA considered to change the reporting format requirements in Article 3 of ITS 4 from XML to JSON for both weekly and daily position reports to ESMA and NCAs respectively. 35. The table below gives an overview of the proposed changes to ITS 4: ID Proposals Section in the CP 1 Add a field “Report type” in Table 1 of Annex I of ITS 4 to reflect the existence of two weekly reports, one excluding options. This field takes the value ‘COMB’ for the report combining futures and options, and the value ‘FUTR’ for the report excluding options. 3.2.1.1 2 Add a field “Report type” in Table 3 of Annex I of ITS 4 to reflect the existence of two weekly reports, one excluding options. This field takes the value ‘COMB’ for the report combining futures and options, and the value ‘FUTR’ for the report excluding options. 3.2.1.1 3 Amend the description of the field “number of positions” in Table 3 of Annex I of ITS 4 to reflect the existence of two weekly reports, as follows “If the field “Report type” is equal to ‘COMB’, option contracts shall be included in the aggregation and reported on a delta-equivalent basis. If the field “Report type” is equal to ‘FUTR’, option contracts shall not be included in the aggregation.” 3.2.1.1 4 Delete references to emission allowances (spot) in ITS 4. 3.2.1.2

11 5 Amend the description of the field “Notation of the position quantity” in Table 3 of Annex I of ITS 4 (weekly position reports) to specify that positions in derivatives on electricity and natural gas should be expressed in units of underlying and that positions in other derivatives should be expressed in lots. In the same field, amend the format accordingly. 3.2.1.3 6 Amend the descriptions and formats of the fields “Position quantity” and “Notation of the position quantity” in Table 2 of Annex II of ITS 4 (daily position reports), to align with the above changes on weekly position reports: deletion of reference to emission allowances and amendments regarding reporting units. 3.2.1.4 7 Drafting changes to fields “Position type”, “Position maturity” and “Delta equivalent position quantity” in Table 2 of Annex II of ITS 4 (daily position reports): deletion of reference to emission allowances, and deletion of code ‘EMIS’ 3.2.1.4 8 Drafting changes to the fields “Position holder ID”, “Reporting entity ID” and “Ultimate parent ID” in Table 2 of Annex II of ITS 4 (daily position reports): clarifying when the National ID is expected to be used 3.2.1.5 9 Change the format requirements of daily and weekly reports (Article 3 of ITS 4) from XML to JSON 3.2.1.6 36. Moreover, ESMA proposed Draft Technical Advice, on the basis of Article 16a(1) of the ESMA Regulation, 7 to the European Commission to amend Article 83 of CDR 2017/565 reflecting the changes to Article 58 of MiFID II, i.e. the existence of two weekly reports as well as the removal of spot emission allowances from the scope of position reporting. 37. ESMA’s advice aims to clarify that the thresholds in Article 83 of CDR 2017/565 relate to the combined weekly reports, which include options. 4.2 Feedback from consultation 38. The majority of respondents supported the proposed changes to ITS 4. 39. With regard to Change 5, stakeholders requested further guidance on the applicable 10,000 lot threshold for producing weekly position reports as laid out in Article 83(1)(b) of CDR 2017/565 with respect to energy derivatives. Some respondents suggested converting the 10,000 lot threshold in underlying units, such as MWh. 40. With regard to Change 7, a number of respondents recommended for emission allowances to require the most liquid front-year December contracts to be reported under ‘SPOT’ and all other emission allowance contracts under ‘OTHR’ in the field “Position maturity”. 7 “The Authority may, upon a request from the European Parliament, from the Council or from the Commission, or on its own initiative, provide opinions to the European Parliament, the Council and the Commission on all issues related to its area of competence.”

12 41. With regard to Change 8, one respondent suggested adding a statement that LEIs must conform with the Regulatory Oversight Committee policy (ROC). 42. With regard to Change 9, respondents did not identify significant challenges in a potential transition from XML to JSON but expressed the need for an appropriate implementation period and the alignment with other reporting regimes. 43. One respondent requested further clarification on the conditions triggering the publication of either of the two weekly reports to make it less prone to misunderstanding. 44. Regarding ESMA’s Draft Technical Advice, stakeholders raised issues already stated above, regarding the applicable 10,000 lot threshold for energy derivatives, and requested further clarification on the conditions triggering the publication of either of the two weekly position reports. 4.3 ESMA’s assessment and next steps 45. Regarding the comments on the applicability of the 10,000 lot threshold from Article 83(1)(b) of CDR 2017/565 to energy derivatives, ESMA acknowledges the issue and intends to address it via a Q&A, in accordance with Article 16b of the ESMA Regulation. 46. Regarding the suggestion to classify front-year December contracts as spot contracts in the field “Position maturity” for emission allowance derivatives, ESMA believes that this field should be populated consistently for all derivatives, irrespective of their underlying assets. Contracts with emission allowances as underlying asset should thus be classified as SPOT, when their expiry takes place in the current calendar month. 47. ESMA agrees that reported LEIs should conform with the GLEIF Regulatory Oversight Committee policy (ROC) and has added a statement in Table 2 of Annex II of ITS 4. 48. While stakeholders’ feedback on JSON as common reporting format for the purpose of position reporting was overall positive, ESMA has removed the proposal from the draft ITS to mitigate the implementation burden on market participants and NCAs. 49. Regarding stakeholders’ request to clarify the conditions under which either of the two weekly position reports should be published, ESMA points to the explanation provided in paragraph 67 to 70 of the CP. The criteria in Article 83(1)(a) and (b) of CDR 2017/565 should be assessed with futures and option combined. When the criteria are met on the basis of options and futures combined, the weekly report on futures and options combined, and the weekly report excluding options, should both be published. 50. If the open interest of futures alone would not meet both conditions but the open interest of futures and options combined would meet both conditions, both weekly position reports should still be published. 51. In conclusion, ESMA has not introduced further changes to the Technical Advice to the European Commission. On ITS 4, the only changes compared to the version proposed in the CP are a clarification regarding the use of LEIs and the deletion of the amendment introducing JSON as reporting format requirement.

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14 5 Annexes 5.1 Annex I – Feedback from the consultation Question 1: Do you agree with ESMA’s proposal to extend the requirements to set, review and report accountability levels to trading venues trading derivatives on emission allowances? Do you have any other comments on ESMA’s proposed amendments? Please elaborate. The majority of respondents (5) explicitly supported ESMA’s proposal to extend the requirements to set, review and report accountability levels to trading venues trading derivatives on emission allowances. One trading venue also mentioned that all derivatives based on emission allowances are already subject to position management controls on its platform. While not disagreeing with ESMA’s proposed approach, two respondents provided the following views: − One trade association mentioned that these requirements may not offer significant additional value while it would increase the administrative burden and that relevant information is already accessible through registries; − One bank explained not to be against the proposal as long as accountability levels are set at a reasonable limit to allow market makers and financing providers to trade derivatives on emission allowances for market making and financing purposes. It also suggested that ESMA should consider requiring venues to consult with market participants before setting or changing a limit for a specified period of time; and also added that the onus of monitoring is on the trading venue. Only one trade association disagreed with ESMA’s proposal. In particular, the main point raised was that position limits, controls, and reporting should only apply to contracts traded on RMs cleared by a CCP and not also to derivatives on emission allowances traded on MTFs or OTFs as these venues would not know client positions for fungible instruments traded bilaterally or on other venues. The stakeholder suggested that the RTS should explicitly limit accountability to trading venues where trades generate cleared "Open Interest" through an integrated CCP. These rules should not apply to trading venues with participants rather than members or to bilateral forwards on spot emission allowances. Regarding other comments on ESMA’s proposed amendments, three respondents mentioned that the MiFID “quick fix” significantly enhanced the efficiency of commodity derivative markets and that the current frameworks work well and should not be amended beyond what is proposed in the CP. Lastly, one bank asked for clarifications as to whether this requirement would only be imposed on RMs or whether it would also capture MTFs and OTFs.

15 Question 2: Do you foresee any challenges with the use of JSON format comparing to XML? Please provide estimates of the costs and benefits (short- and long term) related to potential transition to JSON? Respondents did not flag significant challenges regarding a transition from XML to JSON. Almost all respondents were not against the proposed change of format requirements. Only one respondent commented that ESMA should not prescribe any kind of format for such a reporting and rather allow flexibility to the industry to adopt its own most efficient solution. According to respondents, factors to be taken into account when bringing forward the transition from XML to JSON are: − Ensuring alignment with other reporting regimes; − Providing adequate transition period for the implementation (6 to 12 months); − Ensuring that NCAs’ systems are ready to receive data in the new format. Question 3: Do you agree with the other proposals to change ITS 4? Please use the reference number in the table above to provide comments on a specific proposal. In relation to the proposed change 5, are there other units of underlying to be added to the existing list including for reporting the information on emission allowances? In relation to the proposed change 7, are there other position types that should be added to provide more granular reporting, beyond the existing (futures, options and other)? In relation to the proposed change 8, do you foresee any scenarios in which the possibility to use the National ID should be retained? The majority of respondents supported ESMA’s proposed changes to ITS 4. With regard to Change 5, the majority of respondents explicitly requested a clarification of the applicable 10,000 lot threshold for producing weekly position reports as laid out in Article 83(1)(b) of CDR 2017/565. As under the revised ITS positions in energy and gas derivatives should be reported in the unit of underlying, guidance on the conversion of the 10,000 lot threshold into reporting units is required. Some respondents suggest explicitly stating the 10,000 lot equivalent amount in underlying units, such as MWh. With regard to Change 7, a number of respondents explained that with the deletion of the ‘EMIS’ category for emission allowances, emission allowance futures will have to be classified according to their maturity into ‘SPOT’ (indicating the spot month contracts) and ‘OTHR’ (indicating all other month contracts). Several respondents recommended for emission allowances to require the most liquid front-year December futures to be reported under ‘SPOT’ and all other emission allowance futures under ‘OTHR’. The approach would be in line with position management arrangements of exchanges, which set separate accountability levels for the December emission allowances contract and all other contract maturities.

16 Change 8 was supported by all respondents. One respondent suggested adding a clarification that LEIs must conform with the Regulatory Oversight Committee policy (ROC) to ensure that the LEI refence data is constantly up-to-date and accurate. One respondent requested ESMA to further clarify paragraph 68 of the CP, to make the conditions triggering the weekly reporting less prone to misunderstanding. One respondent disagreed with ESMA’s proposal altogether. The respondent suggested to move the context of ITS 4 from MiFID II to EMIR or limit its scope to “exchange traded derivatives”, or otherwise disapply to MTFs and OTFs under MiFID II. Question 4: Do you support the draft Technical Advice related to Article 83 of CDR 2017/565? The majority of respondents suggested ESMA’s advice to contain a clarification of the applicable 10,000 lot threshold for producing weekly position reports as laid out in in Art 83(1)(b) CDR 2017/565, with regard to energy derivatives that are not reported in lots. Some respondents indicated the need for further clarification on the requirements to produce either of the two weekly position reports. One respondent disagreed with ESMA’s proposal altogether. The respondent suggested that ESMA should advise the Commission to limit Article 83 of CDR 2017/565 to “exchange traded derivatives” or change the term “trading venue” in point (1) to regulated market in order to disapply to MTFs and OTFs under MiFID. Similarly, and mindful that MiFID II combined “futures” and “forwards”, under points (a) and (b) the terms “futures and options” should each be clarified by the preposition “exchange traded “.

17 5.2 Annex II – Draft technical standards 5.2.1 Amendments to the RTS on position management controls COMMISSION DELEGATED REGULATION (EU) …./…. of [ ] amending Commission Delegated Regulation (EU) 2022/1299 of 24 March 2022 with regard to regulatory technical standards specifying the content of position management controls by trading venues (Text with EEA relevance) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU28, and in particular Article 57(8), first subparagraph, thereof, Whereas: (1) Directive (EU) 2024/790 of the European Parliament and of the Council sets out amendments to Directive 2014/65/EU as regards the scope of position management controls under Article 57(8) of Directive 2014/65/EU. (2) In accordance with those amendments to Article 57(8) of Directive 2014/65/EU the scope of the position management controls included in Commission Delegated Regulation (EU) 2022/1299, applicable to trading venues trading commodity derivatives, should be extended to trading venues trading derivatives on emission allowances. (3) The amendments to Article 57(8) of Directive 2014/65/EU, set out in Directive (EU) 2024/790, will apply from 29 September 2025. To ensure consistency and legal certainty, this Regulation should apply from the same date. (4) This Regulation is based on the draft regulatory technical standards submitted to the Commission by the European Securities and Markets Authority (ESMA). (5) ESMA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based and requested the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council. ESMA did not analyse the potential related costs and benefits as this would have been disproportionate in relation to the nature of the

18 amendments which are a direct consequence of a change in the legal text and are expected to have a very limited impact on market participants; HAS ADOPTED THIS REGULATION: Article 1 Amendments to Delegated Regulation (EU) 2022/1299 Delegated Regulation (EU) 2022/1299 is amended as follows: (1) Article 1 is replaced by the following: ‘Article 1 General monitoring obligations Trading venues shall have arrangements in place for the ongoing monitoring of positions held by end position holders and parent undertakings in each commodity derivative or derivative on emission allowances traded on their trading venues’; (2) Article 2 is replaced by the following: ‘Article 2 Accountability levels

1. As part of their position management controls, trading venues offering trading in commodity derivatives or derivatives on emission allowances shall set accountability levels in the spot month as defined in Article 2, point (3) of Commission Delegated Regulation (EU) 2022/1302 (1

8. and in the other months as defined in Article 2, point (4) of Delegated Regulation (EU) 2022/1302 for commodity derivatives or derivatives on emission allowances made available for trading that are physically settled or can be physically settled.

2. For the purpose of paragraph 1, an accountability level is the level of the net position held in a commodity derivative or derivative on emission allowances by an end position holder or parent undertaking that, when exceeded, may trigger a request for additional information by the trading venue in accordance with paragraph 3.
3. When a net position held by an end position holder or a parent undertaking in a commodity derivative or derivative on emission allowances referred to in paragraph 1 exceeds the accountability level set for the spot month or for the other months in accordance with paragraph 1 of this Article, the trading venue shall, where deemed appropriate, obtain (1) Commission Delegated Regulation (EU) 2022/1302 of 20 April 2022 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the application of position limits to commodity derivatives and procedures for applying for exemption from position limits (OJ L 197, 26.7.2022, p. 52).

19 information as to the nature and purpose of the position held in that commodity derivative or derivative on emission allowances. When assessing whether it is appropriate to obtain information, the trading venue shall take into account the frequency by which the accountability levels are exceeded by the same end position holder or parent undertaking, the magnitude of the excess and other relevant information already available’. Article 2 Entry into force and application This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from 29 September 2025. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Commission The President

20 5.2.2 Amendments to ITS 4 COMMISSION IMPLEMENTING REGULATION (EU) …/… of [.] amending Implementing Regulation (EU) 2017/1093 laying down implementing technical standards with regard to the format of position reports by investment firms and market operators (Text with EEA relevance) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU ( 1 ), and in particular Article 58(5), third subparagraph, thereof, Whereas: (1) Directive (EU) 2024/790 of the European Parliament and of the Council ( 2 ) sets out amendments to Article 58 of Directive 2014/65/EU as regards position reporting. (2) In accordance with those amendments to Article 58 of Directive 2014/65/EU, position reporting no longer applies to emission allowances as referred to in Section C.11 of Annex I of that Directive. Therefore, references to this category of financial instruments in the implementing technical standards laid down in Commission Implementing Regulation (EU) 2017/1093 ( 3 ) should be deleted. (3) In addition, in accordance with those amendments to Article 58 of Directive 2014/65/EU, trading venues where options are traded are required to publish a weekly report excluding options, in addition to the existing weekly report with positions on futures and options combined. Therefore, to ensure that market participants can distinguish between the two types of weekly reports, the relevant reporting fields in the implementing technical standards laid down in Commission Implementing Regulation (EU) 2017/1093 ( 3 ) should be amended. (4) To ensure that positions on electricity and natural gas derivatives can be compared and aggregated across venues in the weekly position reports, trading venues should provide the figures on positions on those contracts in the unit of the underlying. Therefore, the relevant reporting fields in the implementing technical standards laid down in Commission Implementing Regulation (EU) 2017/1093 ( 3 ) should be amended (3 (5) Implementing Regulation (EU) 2017/1093 should therefore be amended accordingly.

21 (6) The amendments to Article 58 of Directive 2014/65/EU, set out in Directive (EU) 2024/790, will apply from 29 September 2024. To ensure consistency and legal certainty, this Regulation should apply from the same date; (7) This Regulation is based on the draft implementing technical standards submitted to the Commission by the European Securities and Markets Authority. (8) The European Securities and Markets Authority has conducted open public consultations on the draft implementing technical standards on which this Regulation is based, analysed the potential related costs and benefits as part of the consultation paper and requested the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council ( 4 ), HAS ADOPTED THIS REGULATION: Article 1 Implementing Regulation (EU) 2017/1093 is amended as follows: (1) Article 1 is amended as follows: (a) paragraph 1 is replaced by the following: ‘1. Investment firms or market operators operating a trading venue shall prepare the weekly report referred to in Article 58(1)(a) of Directive 2014/65/EU, separately for each commodity derivative or derivative of emission allowances that is traded on that trading venue, in accordance with the format set out in the tables of Annex I to this Regulation.’ (b) paragraph 2 is replaced by the following: ‘2. The reports referred to in paragraph 1 shall contain the aggregate of all positions held by the different persons in each of the categories set out in Table 1 to Annex I in an individual commodity derivative or derivative of emission allowance that is traded on that trading venue.’ (2) Annex I is amended in accordance with Annex I to this Regulation. (3) Annex II is amended in accordance with Annex II to this Regulation. Article 2 This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

22 It shall apply from 29 September 2025. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, For the Commission The President Ursula VON DER LEYEN ( 1 ) OJ L 173, 12.6.2014, p. 349. ( 2 ) Directive (EU) 2024/790 of the European Parliament and of the Council of 28 February 2024 amending Directive 2014/65/EU (OJ L, 8.3.2024, p. 1). ( 3 ) Commission Implementing Regulation (EU) 2017/1093 of 20 June 2017 laying down implementing technical standards with regard to the format of position reports by investment firms and market operators (OJ L 158, 21.6.2017, p. 16). ( 4 ) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84). ANNEX I Table 1 of Annex I to Implementing Regulation (EU) 2017/1093 is replaced by the following: ‘Table 1 Table of fields to be reported for all positions across all maturities of all contracts for the purposes of Article 2 {Name of Trading Venue} {Trading Venue Identifier} {Date to which the Weekly Report refers} {Date and time of Publication} {Name of Commodity Derivative Contract or Derivative of Emission Allowance} {Venue product code} {Report status}

23 {Report type} Notation of the position quantity Investment Firms or credit institutions Investment Funds Other Financial Institutions Commercial Undertakings Operators with compliance obligations under Directive 2003/87/EC Long Short Long Short Long Short Long Short Long Short Number of positions Risk Reducing directly related to commercial activities Other Total Changes since the previous report (+/– ) Risk Reducing directly related to commercial activities Other Total Percentage of the total open interest Risk Reducing directly related to commercial activities Other Total

24 Number of Persons holding a position in each category Combined Total Table 3 of Annex I to Implementing Regulation (EU) 2017/1093 is replaced by the following: ‘Table 3 Table of fields to be reported for every commodity derivative or derivative of emission allowance for the purposes of Article 1 FIELD DETAILS TO BE REPORTED FORMAT FOR REPORTING Name of Trading Venue Field to be populated with the full name of the trading venue. {ALPHANUM-350} Trading Venue Identifier Field to be populated with the ISO 10383 segment MIC of the trading venue. Where the segment MIC does not exist, use the operating MIC. {MIC} Date to which the Weekly Report refers Field to be populated with the date corresponding to the Friday of the calendar week on which the position is held. {DATEFORMAT} Date and time of Publication Field to be populated with the date and time on which the report is published on the trading venue's website. {DATE_TIME_FORMAT} Name of Commodity Derivative Contract, Derivative of Emission Allowance Field to be populated with the name of the commodity derivative contract or derivative of emission allowance identified by the venue product code. {ALPHANUM-350} Venue product code Field to be populated with a unique and unambiguous alphanumeric identifier utilised by the trading venue grouping together contracts with different maturities and strike prices in the same product. {ALPHANUM-12}

25 Report status Indication as to whether the report is new or a previous report is cancelled or amended. Where a previously submitted report is cancelled or amended, a report which contains all the details of the original report should be sent and the ‘Report status’ should be flagged as ‘CANC’. For amendments a new report that contains all the details of the original with all necessary details amended should be sent and the ‘Report status’ should be flagged as ‘AMND’. ‘NEWT’ — New ‘CANC’ — Cancellation ‘AMND’ — Amendment Report type Indication as to whether the report is the one combining positions on options and futures positions, or the one excluding options positions. ‘COMB’— Report with futures and options combined ‘FUTR’ — Report excluding options Number of positions Field to be populated with the aggregate quantity of open interest held on Friday at the end of the trading day. If the field “Report type” is equal to ‘COMB’, option contracts shall be included in the aggregation and reported on a delta￾equivalent basis. If the field “Report type” is equal to ‘FUTR’, option contracts shall not be included in the aggregation. {DECIMAL-15/2} Notation of the position quantity This field shall be populated with the units used to report the number of positions. For derivatives on electricity and natural gas, the quantity should be expressed in units of the underlying. For other derivatives, the quantity should be expressed in lots. ‘LOTS’ or ‘MWHO’ — megawatt hours ‘MBTU’ — one million British thermal units ‘THMS’ — Therms Changes since the previous report (+/–) Field to be populated with the position quantity reflecting the increase or decrease {DECIMAL-15/2}

26 in the position with respect to the previous Friday. In the case of a decrease in the position the number shall be expressed as a negative number prefixed with ‘–’ (minus). Percentage of the total open interest Field to be populated with the percentage of the total open interest represented by the positions. {DECIMAL-5/2} Number of persons holding a position in each category Field to be populated with the number of persons holding a position in the category. If the number of persons holding a position in the category is below the number specified in Commission Delegated Act in respect of Article 58(6) MiFID II ( 1 ), the field shall be populated with ‘.’ (full stop). {INTEGER-7} or {ALPHANUM-1} if the field has to be populated with ‘.’ (full stop). ( 1 ) Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (OJ L 87, 31.3.2017, p. 1). ANNEX II Table 2 of Annex II to Implementing Regulation (EU) 2017/1093 is replaced by the following: ‘Table 2 Table of fields to be reported for all positions across all maturities of all contracts for the purposes of Article 2 FIELD DETAILS TO BE REPORTED FORMAT FOR REPORTING Date and time of report submission Field to be populated with the date and time on which the report is submitted. {DATE_TIME_FORMAT} Report reference number Field to be populated with the unique identifier given by the submitter unambiguously identifying the report to both submitter and receiving competent authority. {ALPHANUM-52} Date of the trading day of the reported position Field to be populated with the date on which the reported position is held at the close of the trading day on the relevant trading venue. {DATEFORMAT} Report status Indication as to whether the report is new or a previously submitted report is cancelled or amended. ‘NEWT’ – New ‘CANC’ – Cancellation ‘AMND’ – Amendment

27 Where a previously submitted report is cancelled or amended, a report which contains all the details of the original report and using the original Report Reference Number should be sent and the ‘Report status’ should be flagged as ‘CANC’. For amendments a new report that contains all the details of the original report and using the original Report Reference Number with all necessary details amended should be sent and the ‘Report status’ should be flagged as ‘AMND’. Reporting entity ID The identifier of the reporting investment firm. Field to be populated with the Legal Entity Identifier code (LEI) ( 1 ). {LEI} Position holder ID Field to be populated with the Legal Entity Identifier code (LEI) ( 1 ) for legal entities or {NATIONAL_ID} for natural persons who are acting as private individuals that are not eligible for an LEI. (Note: if the position is held as a proprietary position of the reporting firm, this field shall be identical to field ‘Reporting entity ID’). {LEI} or {NATIONAL_ID} – Natural persons Email address of position holder Email address for notifications of position￾related matters. {ALPHANUM-256} Ultimate parent entity ID Field to be populated with the Legal Entity Identifier code (LEI) ( 1 ) for legal entities or {NATIONAL_ID} for natural persons who are acting as private individuals that are not eligible for an LEI. Note: this field may be identical to field ‘Reporting entity ID’ or ‘Position holder ID’ if the ultimate parent entity holds its own positions or makes its own reports. {LEI} or {NATIONAL_ID} – Natural persons Email address of ultimate parent entity Email address for correspondence in relation to aggregated positions. {ALPHANUM-256} Parent of collective investment scheme status Field to report on whether the position holder is a collective investment undertaking that makes investment decisions independently from its parent as set out by Article 4(2) of Commission Delegated Regulation (EU) 2022/1302 ( 2 ). ‘TRUE’ – the position holder is a collective investment undertaking that makes independent investment decisions ‘FALSE’ – the position holder is not a collective investment undertaking

28 that makes independent investment decisions Identification code of contract traded on trading venues Identifier of the commodity derivative or derivative of emission allowance. See field ‘Trading venue identifier’ for treatment of OTC contracts that are economically equivalent to contracts that are traded on trading venues. {ISIN} Venue product code Field to be populated with a unique and unambiguous alphanumeric identifier utilised by the trading venue grouping together contracts with different maturities and strike prices in the same product. {ALPHANUM-12} Trading venue identifier Field to be populated with the ISO 10383 segment MIC for positions reported in respect of on-venue contracts. Where the segment MIC does not exist, use the operating MIC. {MIC} Use MIC code ‘XXXX’ for off-venue positions in economically equivalent OTC contracts. Use MIC code ‘XOFF’ for listed derivatives traded off-exchange. Position type Field to report whether the position is in either futures, options, or any other contract type. ‘OPTN’ – Options, including separately tradable options on FUTR or OTHR types, excluding products where the optionality is only an embedded element ‘FUTR’ – Futures ‘OTHR’ – any other contract type Position maturity Indication of whether the maturity of the contract comprising the reported position relates to the spot month or to all other months. Note: separate reports are required for spot months and all other months. ‘SPOT’ – spot month ‘OTHR’ – all other months Position quantity Field to be populated with the net position quantity held in the commodity derivative or derivative on emission allowances. This field should be populated with a positive number for long positions and a negative number for short positions. {DECIMAL-15/2} Notation of the position quantity This field shall be populated with the units used to report the number of positions. ‘LOTS’ or

29 For derivatives on electricity and natural gas, the quantity should be expressed in units of the underlying. For other derivatives, the quantity should be expressed in lots. ‘MWHO’ — megawatt hours ‘MBTU’ — one million British thermal units ‘THMS’ — Therms Delta equivalent position quantity If the Position Type is ‘OPTN’, then this field shall contain the delta-equivalent quantity of the position reported in the ‘Position Quantity’ field. This field should be populated with a positive number for long calls and short puts and a negative number for long puts and short calls. {DECIMAL-15/2} Indicator of whether the position is risk reducing in relation to commercial activity Field to report whether the position is risk reducing in accordance with Article 7 of Delegated Regulation (EU) 2022/1302(2 ). ‘TRUE’ – the position is risk reducing ‘FALSE’ – the position is not risk reducing ( 1 ) Legal Entity Identifiers shall be compliant with the ISO 17442 standard and included in the Global LEI database maintained by the Central Operating Unit appointed by the Regulatory Oversight Committee and pertain to the entity concerned. ( 2 ) Commission Delegated Regulation (EU) 2022/1302 of 20 April 2022 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the application of position limits to commodity derivatives and procedures for applying for exemption from position limits (OJ L 197, 26.7.2022, p. 52).

30 5.2.3 Technical Advice on position reporting (Art. 83 of CDR 2017/565) The below draft technical advice to the European Commission is provided in accordance with Article 16a(1) of the ESMA Regulation9 . ESMA suggests replacing Article 83 of CDR 2017/565 as follows: Article 83 Position reporting (Article 58(1) of Directive 2014/65/EU)

1. For the purpose of the weekly reports referred to in Art 58(1)(a) of Directive 2014/65/EU, the obligation for a trading venue to make public such reports shall apply when both of the following two thresholds are met: (a) 20 open position holders exist in a given contract, futures and options combined, on a given trading venue and (b) the absolute amount of the gross long or short volume of total open interest expressed in the number of lots of the relevant commodity derivative, futures and options combined, is equal to, or exceeds, 10 000 lots. For derivatives on emission allowances point (b) shall not apply. 9 The Authority may, upon a request from the European Parliament, from the Council or from the Commission, or on its own initiative, provide opinions to the European Parliament, the Council and the Commission on all issues related to its area of competence."