Position limits under Article 57 MiFID II cap the maximum net position in commodity derivatives, aiming to prevent market abuse and ensure orderly price formation.
Since 3 January 2018, MiFID II has imposed quantitative caps on net positions in commodity derivatives. Position limits are set by national competent authorities — in Germany by BaFin — on the basis of Delegated Regulation (EU) 2017/591. They apply to all natural and legal persons, with positions aggregated at group level. Exemptions exist for risk-reducing hedging transactions and for firms whose derivatives trading constitutes an ancillary activity.
4 service modules
Bookable individually or as an end-to-end programme.
We analyse your existing derivatives positions and verify compliance with position limits under Article 57 MiFID II.
We support the implementation of systems for ongoing position monitoring and position management under MiFID II.
Setup and optimisation of your reporting processes for daily position reporting under Article 58 MiFID II.
Advisory and support for the assessment and application of regulatory exemptions from position limit requirements.
5 phases
Our advisory approach to commodity derivatives position limits combines regulatory expertise with hands-on implementation experience. We guide you through every phase — from regulatory assessment to ongoing compliance.
Analysis of your derivatives portfolio and identification of reportable positions
Review of ancillary activity exemption and hedging exemption applicability
Setup of position monitoring and reporting systems
Establishment of daily position reporting to competent authorities
Monitoring regulatory changes and adapting compliance processes
Your contact
Melanie Düring
Head of Risk Management
The strategic optimization of MiFID Position Limits compliance is fundamental for the transparency and efficiency of modern position processes. Our AI-supported position solutions enable institutions not only to achieve regulatory compliance, but also to develop strategic competitive advantages through intelligent Risk Control optimization and automated Trading Limits. By combining deep position expertise with advanced AI technologies, we create sustainable operational advantages while protecting sensitive company data and achieving optimal Compliance Surveillance performance.
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Position limits under Article 57 MiFID II are quantitative caps on the maximum net position a person or corporate group may hold in commodity derivatives. They apply to all natural and legal persons trading on EU trading venues or in economically equivalent OTC contracts. The limits are set by the relevant national competent authority — in Germany by BaFin — and aim to prevent market abuse and ensure orderly price formation.
The regime covers options, futures, swaps and forward contracts whose underlying asset is a commodity — including agricultural products, energy, metals, climate variables and freight derivatives. Since the Covid Quick-Fix Directive (2021/338), ESMA enforcement focuses on agricultural derivatives and significant contracts with at least 300,000 lots of open interest.
The ancillary activity exemption under Article 2(1)(j) MiFID II exempts firms from MiFID II authorisation requirements where their commodity derivatives trading is ancillary to their main business. The application is submitted to the national competent authority and requires demonstrating that derivatives trading is subordinate relative to the firm's overall business activity.
Trading venue operators and investment firms must submit daily position reports for commodity derivatives and emission allowances to their national competent authority. Reports must cover the positions of members, participants and their clients, broken down by hedge and non-hedge positions.
Calculation is based on a baseline figure per Articles 9, 11 and 13 of Delegated Regulation (EU) 2017/591. Typically the limit is 25% of deliverable supply or open interest. A distinction is made between spot-month limits and other-months limits. National competent authorities publish indicative position limits for derivatives traded on their venues.
The hedging exemption allows non-financial entities to hold positions exceeding position limits where those positions demonstrably reduce risk related to their commercial activity. The application must be filed with the relevant national competent authority and requires a detailed description of the hedging relationship.
ADVISORI guides financial institutions and trading firms through the full implementation of MiFID II position limits: from gap analysis through system implementation to ongoing reporting. Our consultants have experience working with regulatory authorities and support exemption assessments, position monitoring system setup, and establishment of sustainable compliance processes.
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