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Commodity trade in UK may have some position limit leeway after Brexit 

July 8, 2016

Pratima Desai, Reuters

Britain-based commodity exchanges may have some leeway in the way they manage large positions after the UK exits the European Union, but they will still have to comply with EU rules from 2018, experts say.

Position limits, a way of controlling how much of an individual commodity trading firms can hold, are being introduced for the first time in the Markets in Financial Instruments Directive II (MiFID II) from January 2018.

Britain voted to leave the EU last month, but its exit has to be negotiated with the remaining 27 members, a process that is meant to be completed within two years of triggering a formal legal process.

"It is too early to say what any new UK regime will look like particularly given pressure for equivalence," James Maycock, a director at KPMG, said, referring to companies having to prove that rules in their home countries are equivalent to those in the EU.

"But UK commodity trading venues may have more flexibility in setting position limits if they are not subject to MiFID II." Read more

 
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