ESMA_QA_1278
23/09/2022
Subject Matter
Hedge exemption
Original question
Can a hedge exemption be netted against positions in derivatives which are not objectively measurable as reducing risks directly related to that person’s commercial activity?
ESMA Answer
23-09-2022
Original language
[ESMA70-872942901-36 Commodity derivatives, Position limits, Q&A11]
No. Once an exemption has been granted and positions are approved as risk-reducing in accordance with Article 8 of RTS 21a, those positions fall outside the position limit regime. Otherwise, the benefit of a risk-reducing position would be double-counted, by first being excluded from the limit and then being used to offset a speculative exposure.
Status: Answer Published
Additional Information
Level 1 Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Position limits