As Aviv Handler of ETR Advisory reminded me, it’s been 10-years already since all the new rules and regulations in commodity trading began to emerge. Time flies! “People are finally getting used to it and upping their game as they go,” he said referring to the regulations. “Even new entrants appear to more aware of the regulatory side of things and they try to be efficient in how they deal with them.” Aviv is a well-known regulatory advisor and expert who approaches his topic with a sense of humor and an encyclopedic knowledge of the regulations that ComTech has known and worked with for many years, and he maintains a very informative website that is a must for anyone wanting to know about the regulations and their impacts.
Right now, Aviv says he remains very busy but that his workload is much more evenly spread among the various regulations and across all sides of the industry than it was a few years ago. These days many inquiries relate to changes to existing regulations like the MIFID2 “quick fix”, an example of the EU’s attempts to roll back some of the more burdensome requirements. “Another area is related to the energy transition and distributed generation and how the regulations may impact there,” he said. “BREXIT also complicates things a bit with two streams and sets of regulations that may eventually diverge and on the anti-abuse side of things, we see more cases all of the time,” he says. “Meaning that trade surveillance is happening.” He adds that BREXIT creates a bit of an administrative burden as well as potential issues with EMIR clearing thresholds as UK exchanges are no longer recognized as equivalent by the EU.
Hydrogen is a possible emerging area as well, he told me. “In general, there is a lot of talk around Hydrogen right now and a recent ACER newsletter foresaw a wholesale market developing and argued that a REMIT-like regulation would be required. Of course, it remains to be seen if it will take off and is still a way off.” If that market were to develop, however, it would need such measures to apply.