Guidelines on the Market Abuse Regulation - Information on commodity derivatives markets or related spot markets for the purposes of defining inside information on commodity derivatives

17/01/2017 | ESMA/2016/1480 HR
Guidelines on the Market Abuse Regulation
Information on commodity derivatives markets or related spot markets for the purposes of defining inside information on commodity derivatives

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Table of Contents
1 Scope .......................................................................................................... 3
2 Reference documents, abbreviations and definitions ........................................................................ 3
3 Purpose.............................................................................................................................. 4
4 Compliance and reporting obligations................................................................................ 4
4.1 Status of guidelines...................................................................................................... 4
4.2 Reporting requirements.......................................................................................... 4
5 Guidelines on information on commodity derivatives markets or related spot markets for the purposes of defining inside information on commodity derivatives.................................. 4

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1 Scope
Who?

1. These guidelines apply to competent authorities and market participants, financial intermediaries, trading venue operators, and persons who professionally organize and execute transactions in commodity derivatives (collectively referred to as "market participants").
   What?
2. In accordance with Article 7(5) of Regulation (EU) No 596/2014 of the European Parliament and of the Council, these guidelines provide an open indicative list of information which is reasonably expected to be published or must be published in accordance with legal or regulatory provisions at Union or national level, market rules, contracts, practices or customs on the relevant commodity derivatives markets or spot markets, as referred to in point (b) of Article 7(1) of Regulation (EU) No 596/2014.
   When?
3. These guidelines shall apply two months after the publication of the translation into the official languages of the European Union.

2 Reference documents, abbreviations and definitions ESMA European Securities and Markets Authority EU European Union MAR Market Abuse Regulation; Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC1 MiFID II 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/EU2 SL Official Journal of the European Union

1 OJ L 173, 12.6.2014, p. 1–61.
2 OJ L 173, 12.6.2014, p. 349–496.

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REMIT Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency3 3 Purpose
4. The purpose of these guidelines is to provide illustrative examples of information "which is reasonably expected to be published or must be published in accordance with legal or regulatory provisions at Union or national level, market rules, contracts, practices or customs on the relevant commodity derivatives markets or spot markets", as referred to in point (b) of Article 7(1) of the MAR, which constitutes one criterion for the definition of inside information on commodity derivatives under Article 7(1)(b) of the MAR. These guidelines do not further specify other definition criteria (nor the concepts of information accuracy and price sensitivity) nor do they establish additional publication requirements.
4 Compliance and reporting obligations
4.1 Status of guidelines
5. This document contains guidelines issued in accordance with Article 7(5) of the Market Abuse Regulation. Competent authorities and market participants must make all efforts to comply with the guidelines and recommendations.
4.2 Reporting requirements
6. The competent authorities to which these guidelines apply are required to notify ESMA whether they comply or intend to comply with the guidelines, stating reasons for non-compliance. The notification shall be submitted within two months from the date ESMA publishes the guidelines, to [MARguidelinesGL1@esma.europa.eu]. The notification form is available on ESMA's website.
7. Market participants are not required to report on their compliance with these guidelines.
5 Guidelines on information on commodity derivatives markets or related spot markets for the purposes of defining inside information on commodity derivatives
8. In accordance with Article 7(5) of the MAR, these guidelines establish an open indicative list of information which is reasonably expected to be published or must be published in accordance with legal or regulatory provisions at Union or national level, market rules, contracts, practices or customs on the relevant commodity derivatives markets or spot markets, as referred to in Article 7(1)(b) of the MAR.
9. The fact that a certain type of information is not included in the list does not mean it cannot be considered inside information, and likewise, the inclusion of a certain type of information does not mean it will automatically be considered inside information. The assessment of whether information is inside information must be conducted on a case-by-case basis taking into account all criteria established in Article 7(1)(b) of the MAR.
10. For information to be "reasonably expected to be published", it must be (i) widely available to the public without discrimination after publication, (ii) stated in an official statement and not in a private or personal opinion or analysis, and (iii) not be a rumor or speculative statement.
11. The following paragraphs set out examples of information that ESMA considers included in the open indicative list of information which is reasonably expected to be published or must be published, as referred to in Article 7(5) of the MAR.
Examples of information directly related to commodity derivatives
12. Information that trading venues must publish in accordance with Article 58(1)(a) of Directive MiFID II4 on aggregate positions of different categories of persons for various commodity derivatives traded on their trading venue.
13. If commodity derivatives are standardized, market participants may reasonably expect to occasionally receive information about circumstances affecting the fundamental characteristics of the commodity derivative or the contract on which such a commodity derivative is based, such as amendments to the basic specifications of the derivative or the underlying commodity index, periodic changes in the base basket, or changes in delivery location.

4 According to Article 58(1)(a) of Directive MiFID II:
"1. Member States shall ensure that an investment firm or a trading venue operator managing a trading venue for commodity derivatives or emission allowances or their derivatives:
(a) publicly publishes weekly reports on aggregate positions of different categories of persons for various commodity derivatives or emission allowances or their derivatives traded on their trading venue, specifying the number of long and short positions by such categories, changes in positions since the previous report, percentage of total open positions per each category and number of persons holding a position in each category in accordance with paragraph 4, and sends this report to the competent authority and ESMA; ESMA continues to operate a central information repository from these reports." According to Article 58(4), second subparagraph of Directive MiFID II:
"The reports referred to in paragraph 1(a) shall specify the number of long and short positions per category of persons, changes since the previous report, percentage of total open positions represented in each category and number of persons in each category."

14. Information on inventory levels or commodity movements in warehouses and storage facilities which must be published or is reasonably expected to be published in accordance with commodity derivatives market rules or practices.
    Examples of information indirectly related to commodity derivatives without a related spot market
15. Information which is reasonably expected to be published by public authorities within or outside the EU, such as Eurostat, the European Central Bank, national central banks or national statistical offices/institutes, relating to official economic statistics and forecasts such as GDP, balance of payments data and inflation rates.
16. Information relating to cargo shipments which is reasonably expected to be provided and published without discrimination by information providers, non-profit organizations and government bodies.
    Examples of information directly related to spot contracts for commodities
17. Information which must be published in accordance with the REMIT Regulation, relating to wholesale energy products (electricity and gas), including inside information which must be published in accordance with Article 4(1) of the REMIT Regulation.
18. Information on auctions in spot markets for energy product contracts (daily auction, intraday auctions and balancing markets) published after the day of energy delivery in accordance with legal or regulatory provisions of national law or rules or practices on the spot market for energy products.
19. Statistical information publicly available in the Joint Organisations Database Initiative (JODI) database, relating to production, imports, exports, stocks, refinery inputs and demand of oil-related products (e.g. crude oil, gasoline, kerosene), as well as information available in the JODI database for gas.
20. Official statements published at conferences of oil-producing countries if they relate to production level decisions.
21. Information on the production, imports, exports and stocks of commodities underlying commodity derivatives and transactional information on spot market activities which is reasonably expected to be published in accordance with practices on that spot market.
22. Statistical data on commodities which is reasonably expected to be published at national level by public authorities within or outside the EU.
23. Information which is reasonably expected to be published on inter-agency platforms aimed at increasing transparency of the food market and promoting coordination of policy measures in response to market uncertainties, such as the Agricultural Market Information System (AMIS).
24. Information which is reasonably expected to be published by private entities, relating to changes in commodity storage conditions (working hours, fees, etc.), their loading and unloading speed or generally their capacity to handle commodities during storage and delivery, inventory levels or commodity movements in warehouses, published in accordance with spot market practices for commodities.
25. Information which is reasonably expected to be published concerning the existence of serious diseases affecting agricultural products or changes in subsidy policies for those products, resulting from decisions by public authorities.
26. Information on activities and measures undertaken by the Commission, Member States and other officially appointed bodies entrusted with managing agricultural markets in accordance with the Common Agricultural Policy (CAP) and fisheries management in accordance with the Common Fisheries Policy (CFP), to the extent that they publish such information.