As you will be aware, the MiFID II ancillary activity exemption is still very important in the UK in relation to commodity derivatives and emission allowances.
Since leaving the EU, there have been various developments. First, the FCA has provided some guidance on the interpretation of certain parts of the quantitative test which rely on information about the market which the FCA no longer publishes. Second, the EU quantitative test has been amended so it no longer matches the UK version. Third, the government made some amendments that were due to take effect on 1 January 2025, one of which effectively repealed the technical standard in which the quantitative test for the exemption is set out. Fourth, the FCA proposed new guidance to help firms determine in a more qualitative way whether their trading activity is ancillary to the main business of their group. The third and fourth steps reflected the outcome of the Wholesale Markets Review.
The FCA consulted on the guidance for the prop
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