On the 6^th May 2015, the European Securities and Markets Authority (ESMA) published guidelines on the Markets in Financial Instruments Directive (MiFID) I, intended to provide a common, uniform and consistent application of the definitions of commodity derivatives under C6 and C7 of Annex I of the current MiFID I, until the coming into force of MiFID II on the 3^rd January 2017.

The scope of these guidelines is primarily to mitigate the current inconsistent application of EMIR (which refers to the MiFID definition of commodity derivatives) resulting from the different national applications of the said MiFID definitions.

ESMA’s guidelines will apply from the 7th August 2015 and will effectively be superseded by the European Commission’s delegated acts on MIFID II

Accordingly, the ESMA guidelines seek to clarify the definitions by specifying what is meant by “physically settled” and confirming that forwards traded on a regulated market or Multilateral Trading Facility (MTF) fall within the scope of MiFID I, Annex C6.

It is understood that the guidelines represent an interim measure until MiFID II comes into force in 2017, when the European Commission issues its delegated acts in relation to these definitions. Accordingly, ESMA’s guidelines will apply from the 7th August 2015 and will effectively be superseded by the European Commission’s delegated acts on MIFID II.