370.36 POSITION LIMITS ANDPOSITION MANAGEMENT CONTROLS INCOMMODITYDERIVATIVE SAND REPORTING REGULATIONS LEGAL NOTICE 389 of 2017. LEGAL NOTICE 389 of 2017. 1. Title, scope. (1) Thetitle of the se regulation sisthe Position Limitsand Position Management Controlsin Commodity Derivativesand Reporting Regulations. (2) The purposeof the se regulation sistoimplement Article 57(1), (2),), 1), 4), Article 58), Article 69(2)) and Article 79(5) ofMIFIDashere indefined, and theyshallbe inter preted andapplie daccordingly. 2. Definitions. (1) Inthe se regulation sunless thecontex totherwise requires: "the Acts " meansthe Financial Markets Actand Investment Services Act; " Centralcompetentauthority" means the regulatory authority of thetrading venue where thelargest volume of trading takesplace; " Directive 2009/65/EC" means Directive 2009/65/ECof European Parliament and of the Councilof13 July 2009 oncoordination oflaws, regulations andadministrative provision relating toundertakings for collective investment intrans ferablesecurities (UCITS) asamended fromtimetotime, andincludes any implementing measuresthathave beenormaybeissued thereunder; " Directive 2011/61/EC" means Directive 2011/61/EUof European Parliament and of the Councilof8 June 2011on Alternative Investment Fund Managers, asamended fromtimetime, andincludes any implementing measuresthathave beenormaybeissued thereunder; " Directive 2009/138/EC" means Directive 2009/138/ECof European Parliament and of the Councilof 25 November 2009 ontaking-upand pursuitof the business of Insurance and Reinsurance (SolvencyII), asamended fromtimetotime, andincludes any implementing measuresthathave beenormaybeissued thereunder; " Directive 2003/41/EC" means Directive 2003/41/ECof European Parliament and of the Councilof3 June 2003 onactivities and supervision ofinstitutions foroccupationalretirement provision, asamended fromtimetotime, andincludes any implementing measuresthathave beenormaybeissued thereunder; " Directive 2003/87/EC" means Directive 2003/87/ECof European Parliament and of the Councilof 13 October 2003 establishingasche me forgreenhousegasemission allowance trading withinthe Community, asamended fromtimetotime, andincludes any implementing measuresthathave beenormaybeissued thereunder; "ESMA" meansthe European Securities and Markets Authority establishedby Regulation (EU) No 1095/2010 of European Parliament and of the Councilof24 November 2010; " investment firm" meansanylegal person, otherthan personstowhom MiFIDdoes not applyintermsof Article 2 of thesaid Directive, whoseregularoccupation or businessis the provisionofanyone ormore investment servicestothird partie sona profession albasis; " MiFID" means Directive 2014/65/EUof the European Parliament and of the Councilof 15 May 2014 onmarketsfinancialinstruments andamending Directive 2002/92/E Cand Directive 2011/61/EU, asamended fromtimetotime, andincludes any implementing measuresthathave beenormaybeissued thereunder; " MiFIR" means Regulation (EU) No 600/2014 of European Parliament and of the Councilof 15 May 2014 onmarketsin financialinstruments, asamended fromtimetotime; " Regulation (EU) No 1095/2010" means Regulation (EU) No 1095/2010 of the European Parliament and of the Councilof 24 November 2010 establishinga European Supervisory Authority (European Securities and Markets Authority), asamended fromtimetotime; " Regulation (EU) No 1227/2011" means Regulation (EU) No 1227/2011 of the European Parliament and of the Councilof 25 October 2011 on wholesaleenergymarket integrity and trans parency, asamended fromtimetotime; " Regulation (EC) 713/2009" means Regulation (EC) No 713/2009 of the European Parliament and of the Councilof13 July 2009 establishingan Agencyfor the Cooperation of Energy Regulators, asamended fromtimetotime. (2) Words andex pressionsused inthe Actsshall, inthe se regulations, havethesamemean ing asis assignedtothemin Acts. 3. (1) Thecompetentauthorityshall, inlinewithmethodologyforcalculation determinedby ESMA, establishandapplyposition limitson thesize ofanetposition whichapersoncanholdatalltimes incommodity derivativestra de dontrading venues an deconomicallyequivalent OT Ccontracts. (2) Thelimits referredtoins u b-regulation (1) shallbeset on the basis ofall position sheld byaperson and those hel donits behalfatanaggregategrouplevelinorderto: (a) prevent marketabuse; (b) supportorderly pricing and settlement conditions, including preventing market distorting positions, andensuring, inparticular, convergencebet we en prices of derivatives in the deliverymonthands potprices forunderlying commodity, without prejudicetopricedis coveryon themarket for theunderlying commodity. (3) Position limitsshall notapplytoposition sheld byoron behalfofanon-financialentity and whichare objectivelymeasurable as reducingrisks directly relating tothe commercialactivity ofnon-financialentity. (4) Position limitsshallspecifyclearqu antitativethresholdsforthe maximumsize ofapositioninacommodity derivative personscanhold. (5) Thecompetent authoritys hallset limits foreach contractincommodity derivativestra de dontrading venues base d on the methodologyforcalculationas determined by ESM Ain regulatorytechnicalstandardsissued forthat purposein accordancewith Article 57(3) of MiFID. Theposition limitshallincludeeconomicallyequivalent OT Ccontracts. (6) Thecompetentauthorityshallreview position limits where the reisas ignificantchange in delive rable supplyoropen inte restorany others ignificantchangeonthemarket, basedonits determination of delive rable supply and open inte rest andresetposition limitinaccordancewith the methodologyforcalculation developedby ESMA. (7) Thecompetentauthorityshall notify ESMAof the ex actposition limitsitintendstosetin accordancewith the methodologyforcalculationa sestablishedby ESM Ain the regulatorytechnicalstandardsissued forthat purposein accordancewith Article 57(3) of MiFID. (8) Thecompetentauthority shall modifythe position limitsinaccordancewithESMA’sopinionor provide ESMA justification whythechangeisconsidered tobeunnecessary: Providedthat where the competent authority imposes limits contrarytoan ESM Aopinion, itshallimmediatelypublishonits websiteanotice fully explain ingitsreasons fordoing so. (9) Wherethesamecommodity derivative istradedsignificant volumesontrading venues in morethanone juris dictionand thelargest volume of tradingtakesplacein Malta, the competent authority shallset thes ingleposition limittobe appliedonall trading inthat contract. Thecompetent authorityshallconsultthe Europe an regulatory authorities ofothertrading venueson which derivative istra ded ins ignificant volumesonthes ingleposition limittobe applied an dany revisionstothatsin gleposition limit: Providedthat where the competent authority and Europe an regulatory authorities of the othertrading venues donotagree, theyshallstate inwriting the fulland detailed reasons whytheyconsider that the requirementsprescribedins u b-regulations) arenotmet. ESMAwillsettle any dis putearis ing fromdisagreement betwe encompetent authorities inaccordancewithits powersunder Article 19 of Regulation (EU) No 1095/2010. (10) Wherethecompetent authoritydisagrees with thes ingleposition tobeapplied, inthecase where thesamecommodity derivative istra ded ins ignificant volumesontrading venues in morethanone juris dictionand thelargest volume of trading takesplaceoutside Malta, itshallstate inwriting the fulland detailed reasons whyitconsiders that the requirementsprescribedins u b-regulations) arenotmet: Providedthat ESMAwill settle any dis putearis ing adis agreement betwe en the competent authority and the Europe an regulatory authorities inaccordancewithits powersunder Article 19 of Regulation (EU) No 1095/2010. (11) WheretheMFS Ais the competent authority of trading venue where thesamecommodity derivativeistraded, itshallputinplacecooperation arrangements including exchangeof relevant datawiththe Europe an regulatory authorities of the positionholdersinordertoenable the monitoring anden forcement ofthesin gleposition limit. (12) WheretheMFS Ais the competent authority ofpositionholdersinacommodity derivative whichistrade dontrading venue, itshallputinplacecooperation arrangements including exchangeof relevant datawiththe Europe an regulatory authority of thetrading venue where thesamecommodity derivativeistraded, inordertoenable the monitoring anden forcement ofsin gleposition limit. (13) A Maltese investment firmormarket operatoroperating atrading venue whichtrades commodity derivatives shallapplyposition management controls. Thosecontrolsshallincludeatleast, the powers forthetrading venueto: (a) monitor the open interestpositions ofpersons; (b) access information, includingallrelevant documentation, frompersonsaboutthesize and purpose ofpositionorex posure enteredinto, informationa boutbeneficialorunderlyingowners, anyconcertarrangements, andany relatedasset sorlia bilities inthe underlying market; (c) requireapersontoterminate orreduce position, onatem porary or permanent basis as thespecificcasemayrequire andtounilaterallytake appropriate action ensure theterminationorreduction if the persondoes not comply; and (d) where appropriate, require apersontoprovide liquidityback intothemarketatanagreed price and volumeona temporary basis with the ex pressintent ofmitigating effectsofalargeor dominant position. (14) Theposition limits andposition management controlsshallbetrans parentand non-discriminatory, specifyinghow they applytopersons andtaking account ofthenature andcomposition ofmarket participants and of theuse theymake of the contracts submitted totrading. (15) The Maltese investmentormarket operatoroperating the trading venue shallin form the competent authority of the details ofposition management controls. Thecompetent authority shallcommunicate thesame in formationa swellasthe detail sofposition limitsitha sestablishedtoESMA. (16) Thecompetent authority shallnotimpose limits whicharemorerestrictive thanthoseadopted pursu anttos u b-regulations) exceptinexception alcases where theyare objective ly justified and proportionatetaking intoaccount the liquidity ofspecificmarket and the or derlyfunction ing ofthat market. (17) Thecompetentauthorityshall publishonitswebsite details of the morerestrictive position limitsit decides toimpose accordancewiths u b-regulation (18), whichshall bevalid foraninitial periodnotexceeding sixmonths from the date of the ir publication on thewebsite. Themorerestrictive position limitsmay berenewed forfur therperiods notexceeding sixmonthsatatimeif the groundsfor the restriction continuetobe applicable. Ifnotrenewed af terthats ix-monthperiod, theyshallautomaticallyexpire. (18) Wherethecompetent authority decides toimposemorerestrictive position limits, itshall notify ESMA. The notification shallincludea justification forthe morerestrictiveposition limits: Providedthat where the competent authority imposes limits contrarytoan ESM Aopinion, itshallimmediatelypublishonits websiteanotice fully explain ingitsreasons fordoing so. (19) Thecompetent authority shallimposeadministrative penalties andotheradministrativemeasures intermsofregulation 7 forthe in fringementsofposition limitssetin accordancewith this regulationto: (a) position sheld bypersonssituate doroperatingin Maltaorabroad whichexceed the limitsoncommodity derivative contracts the competent authorityhasset in relationtocontractsontrading venuessituate doroperatingin Maltaoreconomicallyequivalent OT Ccontracts; (b) position sheld bypersonssituatedoroperatingin Maltawhichexceed the limitsoncommodity derivative contractsset by Europe ancompetent authorities inother Member Statesor EEAStates. 4. Position reporting bycategories ofpositionholders. (1) A Maltese investment firmoramarket operatoroperating atrading venuewhich trades commodity derivative soremission allowance sorderivatives there of shall: (a) makepublica we eklyreport with the aggregate position sheldbythe differentcategories ofpersons fordifferent commodity derivative soremission allow ance sorderivatives there oftradedonthe irtrading venue, specifying thenum beroflong andshortpositions bysuchcategories, changes theretos ince the previous report, the percentage of totalopen inte restre presented bye achcategory and num ber ofpersonsholdingapositionine achcategory accordancewiths u b-regulations) and communicatethatre porttothe competent authority and to ESMAwhichturnshall proceed toacentralised publication of information includedinsuchreports; and (b) provide the competent authority withcomplete breakdown of the position sheldbyall persons, including the membersor participants and theclients thereof, onthattrading venue, atle astonadailybasis. (2) The Maltese investment firmormarket operator operating atrading venue as referredtoins u b-regulation (1) shall berequiredtoprovide the competentauthority with the in formation referredtoins u b-regulation (1)(b) onlywhenboththenum ber ofpersons and the iropenposition s exceed minimumthresholds. (3) Maltese Investment firmstrading incommodity derivative soremission allowance sorderivatives the re ofoutsidetrading venueshall: (a) wherethe commodity derivative soremission allowance sorderivatives thereofaretradedin Malta, providethecompetentauthority; or(b) wherethe commodity derivative soremission allow ance sorderivatives there ofaretrade doutside Malta, providethe Europe anregulatoryauthority; or (c) wherethe commodity derivative soremission allowance sorderivatives there ofaretra ded ins ignificant volumesontrading venues in morethanone jurisdiction, provide thecentralcompetent authority; atle astonadaily basis withacomplete breakdown of theirpositionstaken incommodity derivative soremission allow ance sorderivatives the re oftra de donatrading venue an deconomicallyequivalent OT Ccontracts, aswellas ofthose of the irclients and theclients ofthoseclient suntilthe endclientisreached, inaccordancewith Article 26 of Mi FIRand, whe re applicable, of Article 8 of Regulation (EU) No 1227/2011. (4) Inordertoenablemonitoring ofcompliance regulation 3) of the seregulations, member sorparticipantsofregulatedmarkets, MTFs andclientsof OTFsshallreportto investment firmormarket operator operating thattrading venue details of theirown position s heldthroughcontractstrade dontrading venueatle astonadaily basis, aswellas those of the irclients and theclients ofthoseclient suntilthe endclientisreached. (5) Personsholding positionsinacommodity derivative oremission allow ance or derivative there of shallbeclassified by investment firmormarket operator operating thattrading venue accordingtothenature of the irmain business, takingaccountofany applicable authorisation, aseither: (a) investment firmsorcreditinstitutions; (b) investment funds, eitheranundertaking forcollective investments intrans ferablesecurities (UCITS) as definedin Directive 2009/65/EC, oran alternative investment fundmanageras definedin Directive 2011/61/EC; (c) otherfinancialinstitutions, including insurance undertakings andre in surance undertakingsas defined Directive 2009/138/EC, andinstitutions foroccupation alretirement provision as definedin Directive 2003/41/EC; (d) commercialundertakings; (e) inthecaseofemission allowance sorderivativesthereof, operators withcompliance obligation sunder Directive 2003/87/EC. (6) Thereportsreferredtoins u b-regulation (1)(a) shallspecifythenum beroflong andshortpositions bycategory ofpersons, anychanges theretos ince the previous report, percentoftotalopen interestre presented bye achcategory, and thenum ber ofpersonsine achcategory. (7) Thereportsreferredtoins u b-regulation (1)(a) and breakdownsreferredtoins u b-regulation (3) shall differentiatebetween: (a) positionsidentifiedaspositions whichinanobjectivelymeasurableway re ducerisks directly relating commercialactivities; and(b) otherpositions. 5. Powersofcompetentauthority. Thecompetentauthoritymay: (a) requestany persontotakestepstoreducesize of the positionorex posure; and (b) limittheability ofanyperson fromentering intoacommodityderivative, including by introducing limits on the size ofaposition any personcanholdatalltimes accordancewithregulation 4 of theseregulations. 6. Notifications. (1) Thecompetent authorityshall notify ESM Aandother Europe an regulatory authorities of the detailsof: (a) anyrequeststoreduce thesize ofapositionorex posurepursu anttoregulation 5(a); (b) any limitsontheability ofpersonstoenterintoacommodity derivative purs u anttoregulation 5(b). (2) Cap. 345 Cap. 370. Thenotification shallinclude, whe rerelevant, the detail s of the requestor the demand pursuanttoarticle 32 of the Financial Markets Act, andarticle 13 of the Investment Services Act, including theidentity of the personor personstowhomitwas addressed and the reasons therefor, aswellas thescopeof the limits introduced pursuanttoregulation 5(b) including the personconcerned, applicable financialinstruments, anylimitsonthesize ofpositions the personcanholdatalltimes, anyexemptions granted thereto, and the reasons the re forinaccordancewith regulation 3 and thereasonstherefor. (3) Thenotifications referredtoins u b-regulation (2) shall bemadenotlessthan 24hours beforethe actionsormeasuresareintended totake effect. Inexception alcircumstances, the competent authoritymaymakethe notification lessthan 24hours be foremeasureisintended totake effect whereitis not possibletogive 24hours’notice. (4) Wherethecompetent authorityreceives anotification fromanother Europe an regulatory authoritypursuantto Article 79(5) of MiFID, itmaytakemeasuresinaccordancewith regulation 5) whereitis satisfied that the measure is necessarytoachieve objective of the other Europe anregulatoryauthority. (5) Where thecompetent authorityproposes totakemeasuresinaccordancewith regulation 5), itshallal sogivenotice inaccordancewith the provisions ofthis regulation. (6) Whenanactionunders u b-regulation (1)) relatestowholesaleenergy products, the competent authorityshallal sonotify the Agency Cooperation of Energy Regulators (ACER) establishedunder Regulation (EC) No 713/2009. 7. Administrative Penalties, otheradministrative measures and Appeal s. L.N.392.L.N.401. (1) Whereaperson falling within thescope of the seregulations failstocomplywithanyprovisions ofsuchregulation soranyrulesissued thereunderfur therimplementing suchregulations, the competent authoritymay, bynotice inwriting and withoutrecoursetoacour thearing, imposeonsuchpersonanadministrative penalty andotheradministrative measures accordancewith the provisions of the Financial Markets Act (MiFIDand MiFIR Administrative Penalties, Measures and Investigatory Powers) Regulations, 2017 or the Investment Services Actand Banking Act (MiFIDand MiFIR Administrative Penalties, Measures and Investigatory Powers) Regulations, 2017. (2) Cap. 345. Cap. 370. Cap. 345. Cap. 370. Arightofappealtothe Financial Services Tribunalshalllie from the decisions which the competent authorityshalltake under the se regulations and the provisions of Part VIof the Financial Markets Actorarticle 19 of the Investment Services Act shallapplymutatis mutandis.