Information on MIFID II exemption ancillary activity

modification date 31 May 2019

Information of Polish Financial Supervision Authority (hereinafter the “the KNF”) on exemption from the application of the MIFID II Directive in relation to the ancillary activity in commodity derivatives, emission allowances or derivatives, where the underlying is emission allowances (referred to in Article 70(1)(10) and art. 70(1f) of the Act on trading in financial instruments and in art. 2(1)(j) of the MIFID II).

Legal basis for the exemption

Article 70(1)(10) and art. 70(1f) of the Act of 29th June 2005 on trading in financial instruments (Journal of Laws of 2018, item 2286, as amended) (hereinafter the "Act") implement the principles of using the exemption, referred to in art. 2(1)(j) of the MIFID II directive including fulfilment of a condition of informing the supervisory authority about intention to make use of the exemption basing on the criterion of the ancillary activity. 

The KNF informs that the provisions of the Commission Delegated Regulation (EU) No. 2017/592 of 1st December 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for the criteria to establish when an activity is considered to be ancillary to the main business (Journal of Laws of the EU, L series of 2017, item 87, p. 492) (hereinafter the „Regulation”), contain a methodology to carry out relevant calculations that will allow to assess the fulfilment (or not) of the conditions for the exemption (an ancillary nature of the activity in relation to the main business).

In order to facilitate the calculation of the size of the European market by asset class under the Regulation, ESMA published an opinion addressed to market participants and relevant national authorities. The current opinion is available in English at the following address (in the section: Ancillary Activity):
https://www.esma.europa.eu/policy-activities/mifid-ii/commodity-derivatives

As of May 27th, 2019, the most recent opinion  published by ESMA is dated May 27, 2019::
https://www.esma.europa.eu/sites/default/files/library/esma70-156-478_opinion_on_market_size_calculation.pdf

The form of sending a notification to the KNF

Since both the Regulation and the Act do not specify what data the  information about the intention to use the exemption based on ancillary activities should contain, the KNF has prepared an exemplary notification form available here. At the same time, the KNF informs that in order for the notification to be legally acceptable, entities should submit the above information in the form indicated below.

The authorized persons legally representing the entities subject to the exemption referred to in art. 70(1)(10) of the Act, should sign the completed notification in accordance with the rules of representation. If the notification is signed by a proxy, the document must be accompanied by the original or a notarized copy of the power of attorney. Both the completed and signed notification as well as the power of attorney should be sent to the KNF in the following chosen form: 

1.    The notification in writing by post to:
Komisja Nadzoru Finansowego,
ul. Piękna 20,
skr. poczt. nr 419,
00-549 Warszawa 
Poland
2.    The notification via the Electronic Platform of Public Administration Services (ePUAP) in a  mode that enables “trusted profile”,
3.    The notification signed with a qualified electronic signature via: ePUAP or by e-mail to knf@knf.gov.pl

Date of submitting of notifications

Bearing in mind the provision of art. 70(1f) of the Act:

  • Entities that have not yet commenced operations referred to in art. 70(1)(10) of the Act, and intend to commence such activity in a given year, should notify the KNF of their intention to do so before performing these activities (the postmark date or the date of submitting the information to the KNF in electronic form will serve as a proof).
  • Entities that are currently performing activities referred to in art. 70(1)(10) of the Act and intend to use the exemption in the next calendar year, should provide the KNF with information about such intention within one month from the calculation referred to in art. 4 of the Regulation, but not later than until 30th April of the year in which they use this exemption.
The updated notification should be submitted every year in case of renewing the exemption.