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We propose an approach based on the ESMA proposal to assess whether the capital employed in the derivatives’ trading is ancillary to the main business. This approach will help to avoid the exiting of market participants and mitigate adverse consequences for energy markets, the wider real economy, and consumers. Specifically:

“For the ancillary activity test calculation: divide the capital employed by the person for MiFID II activity in the EU at group level by the capital employed for business globally at group level. To obtain the capital employed for MiFID II activity in the EU at group level, the person should subtract the sum of all their “privileged transactions” undertaken in the EU at group level and the capital employed for licensed activity (i.e. trading activity that is undertaken by a MiFID authorised entity of the group) from the total amount of capital employed for MiFID II activity in the EU at group level. A person will be captured by the scope of MiFID if the capital employed for its MiFID II activity constitutes more than 5% of the capital employed for the overall activities of the group.” ESMA draft RTS 19 December 2014, https://www.esma.europa.eu/system/files/2014-1570_cp_mifid_ii.pdf  (page 508-9)