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Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 20,787, 18 ta’ Frar , 2022
Taqsima  B
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L.N. 89 of 2022
FINANCIAL MARKETS ACT 
(CAP. 345)
INVESTMENT SERVICES ACT
(CAP. 370)
Position Limits and Position Man agement Controls in Commodity 
Derivatives and Reporting (Amendment) Regulations, 2022
IN EXERCISE of the powers conferred by article 49 of the
Financial Markets Act and article 12 of the Investment Services  Act,
the Minister responsible for the regulation of Financial Servic es,
acting on the advice of the Malta Financial Services Authority, has
made the following regulations:
Citation and 
scope. 
S.L. 345.19.
S.L. 370.36.1. (1) The title of these regulat ions is the Position Limits
and Position Management Controls in Commodity Derivatives and
Reporting (Amendment) Regulations, 2022, and these regulations
shall be read and construed as one with the Position Limits andPosition Management Controls in Commodity Derivatives and
Reporting Regulations, hereinafter referred to as "the principa l
regulations".
(2) The scope of these regulati ons is to transpose Article 1 (2 ),
(10) and (11) of Directive (EU) 2021/338 of the European Parliament
and of the Council of 16 February 2021 amending Directive 2014/65/EU as regards information requirements, product governance and
position limits, and Directives 2013/36/EU and (EU) 2019/878 as
regards their application to investment firms, to help the reco very from
the COVID-19 crisis.
Amends 
regulation 2 of 
the principal 
regulations. 2. Sub-article (1) of regulation 2 of the principal regulations
shall be amended as follows: 
(a) immediately before the de finition "Central competent
authority", there shall be added the following new definition:
""agricultural commodity derivatives" means
derivative contracts relating to products listed in:
(i) Article 1 of Regulation (EU) No 1308/
2013 of the European Parliament and of the Council; 
(ii) Parts I to XX and XXIV/1 of Annex I to
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the Treaties of the European Union; and 
(iii) Annex I to Regulation (EU) No 1379/
2013 of the European Parliament and of the
Council;";
(b) immediately after the defi nition "MIFIR", there shall
be added the following new definition: 
Cap. 370.
Cap. 371.""predominantly commercial group" means any
group of which the main business is not the provision of
investment services within the meaning of the First
Schedule to the Investment Services Act, or the
performance of any activity listed in Annex I to Directive2013/36/EU as transposed in the First Schedule to the
Banking Act, or acting as a market maker in relation to
commodity derivatives;";
Amends 
regulation 3 of the principal 
regulations.3. (1) Regulation 3 of the principal regulations shall be
amended as follows:
(a) sub-regulation (1) of regulation 3 shall be substituted
by the following: 
" (1) The competent authority shall, in line with the
calculation methodology determined by ESMA in the
regulatory technical standards adopted in accordance with
Article 57(3) of MiFID, set and apply limits on the size of a
net position which a person can hold at all times in
agricultural commodity derivatives and critical or
significant commodity derivatives that are traded ontrading venues, and in economically equivalent OTC
contracts: 
Provided that commodity derivatives shall be
considered to be critical or significant where the sum of allnet positions of end position holders constitutes the size of
their open interest and is at a minimum of 300,000 lots onaverage over a one-year period.";
(b) in sub-regulation (2) of regulation 3, for the words
"shall be set on the basis of all positions held by a person an d
those held on its behalf at an aggregate group level in order t o:",
there shall be substituted the wo rds "shall be set based on all
positions held by a person and those held on his or her behalf at
an aggregate group level in order to:";
(c) sub-regulation (3) of regulation 3 shall be substituted
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by the following: 
" (3) The position limits referred to in sub-regulation
(1) shall not apply to:
(a) positions held by, or on behalf of, a non-
financial entity, and which are objectively measurable
as reducing risks directly relating to the commercialactivity of that non-financial entity;
(b) positions held by, or on behalf of, a
financial entity that is part of a predominantly
commercial group and is acting on behalf of a non-
financial entity of the predominantly commercialgroup, where those positions are objectively
measurable as reducing risks directly relating to the
commercial activity of that non-financial entity;
(c) positions held by financial and non-
financial counterparties for positions that areobjectively measurable as resulting from transactionsentered into to fulfil obligations to provide liquidity
on a trading venue as referred to in point (c) of the
fourth sub-paragraph of Article 2(4) of MiFID;
Cap. 370. (d) any other securities as referred to in point
(c) of point 1 to the Second Schedule of theInvestment Services Act whi ch relate to a commodity
or an underlying asset as ref erred to in point 10 of the
Second Schedule to the Investment Services Act.";
(d) sub-regulation (5) of regulation 3 shall be substituted
by the following:
" (5) The competent authority shall set position
limits for critical or signifi cant commodity derivatives and
agricultural commodity derivatives that are traded ontrading venues, based on the calculation methodology laiddown in the regulatory technical standards adopted by the
European Commission pursuant to Article 57(3) of MiFID.
Such position limits shall include economically equivalentOTC contracts.";
(e) sub-regulation (6) of regulation 3 shall be substituted
by the following:
" (6) The competent authority shall review the
position limits referred to in sub-regulation (1) where there
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is a significant change on the market, including a
significant change in deliverable supply or open interest,
based on its determination of deliverable supply and openinterest, and reset those position limits in accordance with
the calculation methodology laid down in the regulatory
technical standards adopted by the European Commissionpursuant to Article 57(3) of MiFID.";
(f) sub-regulation (9) of regulation 3 shall be substituted
by the following:
"(9) Where:
(i) agricultural commodity derivatives based
on the same underlying product and sharing the same
characteristics are traded in significant volumes on
trading venues in more than one jurisdiction; or 
(ii) critical or significant commodity
derivatives based on the same underlying commodityand sharing the same characteristics are traded ontrading venues in more than one jurisdiction; 
and the largest volume of trading takes place in
Malta, the competent authorit y (as the central competent
authority) shall set the single position limit to be applied on
all trading in those derivatives. The competent authority
shall consult the European regulatory authorities of othertrading venues on which th ose agricultural commodity
derivatives are traded in significant volumes or on whichthose critical or significant commodity derivatives aretraded, on the single position limit to be applied and any
revisions to that single position limit: 
Provided that where the competent authority
and the European regulatory authorities of the other tradingvenues do not agree, they shall state in writing the full and
detailed reasons why they consider that the requirementsprescribed in sub-regulations (1) to (3) are not met. ESMA
will settle any dispute arising from a disagreement between
competent authorities in accordance with its powers underArticle 19 of Regulation (EU) No 1095/2010.";
(g) sub-regulation (10) of regulation 3 shall be
substituted by the following:
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" (10) Where:
(i) agricultural commodity derivatives based
on the same underlying product and sharing the same
characteristics are traded in significant volumes on
trading venues in more than one jurisdiction; or 
(ii) critical or significant commodity
derivatives based on the same underlying commodityand sharing the same chara cteristics are traded on
trading venues in more than one jurisdiction; 
and the largest volume of trading does not take
place in Malta, and the competent authority disagrees
with the setting of the single position limit by a
European regulatory authority which qualifies as a
central competent authority, it shall state in writingthe full and detailed reasons why it considers that the
requirements laid down in sub-regulation (1) to (3)
are not met:
Provided that ESMA shall settle any
dispute arising from a disagreement betweencompetent authorities in accordance with its powersunder Article 19 of Regulation (EU) No 1095/2010.";
(h) sub-regulation (11) of regulation 3 shall be
substituted by the following:
" (11) Where the MFSA is the competent authority of
the trading venues in the case of:
(i) agricultural commodity derivatives that
are based on the same underlying product and that
share the same characteristi cs are traded in significant
volumes; or 
(ii) critical or significant commodity
derivatives that are based on the same underlying
commodity and that share the same characteristics; 
are traded, it shall put in place cooperation
agreements with the European regulatory authoritiesof the position holders in the derivatives mentioned inpoints (i) or (ii), which shall include the exchange of
relevant data, in order to enable the monitoring and
enforcement of the single position limit.";
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(i) sub-regulation (12) of regulation 3 shall be
substituted by the following:
"(12)  Where the MFSA is the competent authority of
the position holders in: 
(i) agricultural commodity derivatives that
are based on the same underlying product and that
share the same characteristics are traded in significant
volumes; or 
(ii) critical or significant commodity
derivatives that are based on the same underlying
commodity and that share the same characteristics; 
which are traded on a trading venue, it shall put
in place cooperation agreements with the Europeanregulatory authorities of such trading venues wherethe derivatives mentioned in points (i) or (ii) are
being traded, which shall include the exchange of
relevant data, in order to enable the monitoring andenforcement of the single position limit."; and
(j) sub-regulation (13) of regulation 3 shall be
substituted by the following:
"(13)  An investment firm or a market operator
operating a trading venue  which trades commodity
derivatives shall apply position management controls,including powers for the trading venue to:
(a) monitor the open interest positions of
persons;
(b) obtain information, including all relevant
documentation, from persons about the size andpurpose of a position or exposure entered into,information about beneficial or underlying owners,
any concert arrangements, and any related assets or
liabilities in the underlying market, including, whereappropriate, positions held in commodity derivatives
that are based on the same underlying commodity and
that share the same characteristics on other tradingvenues and in economically equivalent OTC
contracts through members and participants;
(c) request a person to  terminate or reduce a
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position, on a temporary or permanent basis, and to
unilaterally take action to ensure the termination or
reduction of the position where the person does notcomply with such request; and
(d) require a person to provide, on a
temporary basis, liquidity back into the market at anagreed price and volume wi th the express intent of
mitigating the effects of a large or dominantposition.".
Amends 
regulation 4 of 
the principal regulations.4. Regulation 4 of the principal regulations shall be amended
as follows:
(a) in sub-regulation 2 of regulation 4, for the words
"exceed minimum thresholds.", there shall be substituted the
words "exceed minimum thresholds:" and, immediatelythereafter, there shall be added the following new proviso:
Cap. 370."Provided that position reporting as required in
sub-regulation (1) shall not be applicable to any othersecurities as referred to in point (c) of point 1 to the
Second Schedule of the Investment Services Act that
relate to a commodity or an underlying asset as referred to
in point 10 of the Second Schedule to the Investment
Services Act."
(b) sub-regulation 3 of regulation 4 shall be substituted
by the following:
" (3) Maltese investment firms trading in commodity
derivatives or emission allowances or derivatives thereof
outside a trading venue shall provide, at least on a daily
basis:
(a) the competent authority, in line with its
role as central competent authority in terms ofRegulation 3(9); or, 
(b) if there is no central competent authority,
the competent authority of the trading venue wherethe commodity derivatives or emission allowances orderivatives thereof are traded; 
with a complete breakdown of their positions
taken in economically equiv alent OTC contracts and,
when relevant, in commodity derivatives or emission
allowances or derivatives thereof traded on a trading
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Ippubblikat mid-Dipartiment tal-Informazzjoni (doi.gov.mt) — Valletta — Published by the Department of Information (doi.gov.mt) — Valletta
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Prezz /Price
€0.36B 490
venue, as well as of those of their clients and the
respective clients of those clients until the end client
is reached, in accordance with Article 26 ofRegulation (EU) No 600/2014 and, where applicable,
of Article 8 of Regulation (EU) No 1227/2011.".
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