EU Extension of Exemption for Commodity Dealers Finalized

An EU Regulation extending the exemption for commodity dealers from large exposures requirements and own fund requirements was published in the Official Journal of the European Union. The exemption has been extended from December 31, 2017 to December 31, 2020 or until a revised framework for the application of the Capital Requirements Regulation to commodity dealers and investment firms comes into force, whichever is the earlier. The European Council announced in March this year that it had agreed to the extension. 

The original deadline was set on the basis that the European Commission would have conducted a review of the prudential regime applicable to commodity dealers and to investment firms by the end of 2015 and, if appropriate, proposed a legislative regime adapted for the risk profile of commodity dealers and investment firms. The Commissions' review is still in progress and the amending Regulation states that finalization of the review and adoption of any new legislation will only be concluded after December 31, 2017. The extension will avoid the need for relevant firms to temporarily comply with the full CRR requirements in 2018 before being subsequently moved to a tailored regime within two to three years. The extension became effective on July 19, 2016. 

View the amending Regulation.