Isda: EU position limits to snag few OTC commodity contracts

Narrow definition could exclude certain trades and lead to netting problems

Almost no over-the-counter commodity derivatives will be subject to position limits that come into force in the European Union next year, an official at the International Swaps and Derivatives Association has said.

The second Markets in Financial Instruments Directive (Mifid II) will cap the size of a firm’s net position in listed commodity derivatives and ‘economically equivalent’ OTC (EEOTC) contracts. But the Regulatory Technical Standard (RTS) 21 sets out a very narrow definition of the