Preparing the Carbon market for MIFID II compliance

On 3rd January 2018, a major new piece of EU legislation will come into force which will redefine how Carbon Emission Allowances for compliance purposes may be traded. EUAs, EUAAs and CERs will fall under MIFID II (the second incarnation of the Markets In Financial Instruments Directive) and MIFIR (Markets In Financial Instruments Regulation), meaning they will effectively be classed as financial instruments, in the same way as bonds and stocks. As such, these products will only be allowed to be traded according to extensive regulation and procedures typical in the financial markets.

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In practice, this means trading of these products will only be permitted via companies holding an appropriate license as regulated by the financial authority in their respective country. ACT Financial Solutions is currently in the process of applying for this license, together with a separate one which permits provision of associated trading advice. These will enable us to continue serving your Carbon Emissions needs with all the attentive end-to-end detail we pride ourselves upon.

This service will include assisting our clients through all the additional aspects demanded by MIFID, such as applying for your own company’s exemption from needing a trading license and delivering all obliged reporting of your transactions. While MIFID II and MIFIR will generate a significant amount of extra administration, ACT Financial Solutions will do everything possible to relieve you of the burden.

As ever, we will remain your singular reference point for your entire European presence, speaking to you in a language you understand and providing you with the highest possible level of protection and transparency, tailored to your defined market strategy.

Start preparing now

Trading under MIFID II will require us to ensure your company also meets the regulations. In doing this, we can provide any necessary assistance to ease your path to compliance. We can already get started with this process, so that by the time the new legislation comes into effect on 3rd January 2018 you’ll already be in a position to trade.

Whether you are an existing client of ACT Financial Solutions or in need of a new licensed trading partner to support your Carbon Emissions compliance, we strongly advise you to contact us now to get the onboarding procedure underway.

Federico Di Credico