Where an NFE trades only, or partly, for hedging purposes, can every transaction be reported as being for speculative purposes? Can on-venue liquidity provision be also reported as being for speculative purposes?
Answer 11
No. NFEs and financial entities should ensure that their position reports accurately describe their position. This is necessary to ensure the reliability and accuracy of the position reports submitted to NCAs and the published weekly position reports. Accordingly, NFEs are expected to correctly flag positions as hedging (or speculative) based on the conditions established in Article 7 of RTS 21a. In particular, the reports should accurately describe whether the position is risk reducing in relation to the NFE's commercial activities. This is the case even if the NFE does not apply for a hedging exemption under Article 8(1) and (2) of RTS 21a (in accordance with Q&A 14 on position limits) because it does not expect its aggregated positions
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