Wierzbowski Eversheds Sutherland Advises Polish Power Exchange on Implementation of MiFID II

Wierzbowski Eversheds Sutherland’s work included an analysis of the degree of adaptation of PPE’s operations to the requirements for implementation of the directive, which will enter into force on January 3, 2018. The firm’s advice focused on the impact of MiFID II on the markets operated by PPE and the requirements for its organized trading facility (OTF). According to Wierzbowski Eversheds Sutherland, "PPE’s situation required a unique analysis, as the company operates both a commodities exchange and a regulated market under the Act on Trading in Financial Instruments."

According to Wierzbowski Eversheds Sutherland Partner Lukasz Jankowski, "energy markets are covered by financial regulations because of a change in Annex 1 to MiFID II, specifically Section C points 6, 7 and 11. As a rule, derivative contracts for commodities that can be physically settled, apart from the REMIT carve-out, have become regarded as financial instruments, as have emission rights. This entails a number of responsibilities for both the exchange and its participants. The directive provides for a position limits system, reporting duties and transparency. As a new form of trading system market, OTF is a significant issue for the architecture of the energy market. This is due to the exclusion for wholesale energy products (the subject of trading on the OTF) which must be physically settled, i.e. the REMIT carve-out."

"From a practical point of view," Jankowski said "another key aspect is the availability of exemptions from MiFID II for certain entities, in particular the ancillary activity exemption. According to the Q&A published in October by the European Securities and Markets Authority, applications for this exemption in 2018 must be submitted by January 3, 2018. So there is very little time left."

Jankowski led the Wierzbowski Eversheds Sutherland team assisted by Of Counsel Konrad Zacharzewski and Senior Associate Michał Markowski.