You are viewing MAR 10A.3 Annual threshold and ancillary activity tests as it appeared on 01/01/2027. The current version of MAR 10A.3 Annual threshold and ancillary activity tests was last updated on 01/01/2027 .

MAR 10A.3 Annual threshold and ancillary activity tests

Annual threshold test

01/01/2027R
  1. (1) The net outstanding notional exposure must be calculated by averaging the aggregated month-end net outstanding notional values for the previous 12 months resulting from all contracts in commodity derivatives or emission allowances by a person within a group.
  2. (2) The aggregation referred to in (1) must not include positions from contracts resulting from excluded positions.
  3. (3) The net outstanding notional values in (1) must be calculated:
    1. (a) on the basis of all contracts in commodity derivatives or emission allowances for cash settlement to which any person is a party during the relevant calculation period; and
    2. (b) using the netting methodology of MAR 10A.3.3R(4).
  4. (4) The contracts in commodity derivatives or emission allowances for cash settlement must include all such derivative contracts relating to commodities or emission allowances which must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event.

Trading test

01/01/2027R
  1. (1) The size of the activities referred to in MAR 10.2.2R(1) undertaken by:
    1. (a) P; and
    2. (b) other persons in the group,
    3. must be calculated by aggregating the gross notional value of all contracts in commodity derivatives and emission allowances to which that person is a party.
  2. (2) The aggregation referred to in (1) must not include excluded positions in the case of P.
  3. (3) The aggregation referred to in (1) must include excluded positions in the case of other persons in the group.
  4. (4) The overall market trading activities referred to in (1) and (2) must be calculated by aggregating the gross notional value of all contracts traded in the United Kingdom that are:
    1. (a) traded on a UK trading venue; or
    2. (b) in the case of any other contract, are:
      1. (i)  not traded on a trading venue; and
      2. (ii) entered into by a person in the group from an establishment in the United Kingdom.

Capital employed test

01/01/2027R
  1. (1) The estimated capital employed for carrying out the activities referred to in MAR 10A.2.2R(2), is the sum of:
    1. (a) 15% of each net position, long or short, multiplied by the price for the commodity derivative or emission allowance; and
    2. (b) 3% of the gross position, long plus short, multiplied by the price for the commodity derivative or emission allowance.
  2. (2) The positions in (1) must be calculated on the basis of all contracts traded in the United Kingdom in commodity derivatives or emission allowances to which any person in the group is a party during the relevant calculation period and which:
    1. (a) are traded on a UK trading venue; or
    2. (b) in the case of any other contract are not traded on a trading venue.
  3. (3) The calculation in (1) must not include excluded positions.
  4. (4) For the purposes of (1)(a):
    1. (a) the net position in a commodity derivative or an emission allowance must be determined by netting long and short positions:
      1. (i) in each type of commodity derivative contract with a particular commodity as underlying in order to calculate the net position per type of contract with that commodity as underlying; or
      2. (ii) in each type of emission allowance contract in order to calculate the net position in that emission allowances contract; and
    2. (b) net positions in different types of contracts with the same commodity as underlying or different types of derivative contracts with the same emission allowance as underlying can be netted against each other.
  5. (5) For the purposes of (1)(b):
    1. (a) the gross position in a commodity derivative or an emission allowance must be determined by computing the sum of the absolute values of the net positions per type of contract with a particular commodity as the underlying, per emission allowance contract or per type of derivative contract with a particular emission allowance as the underlying; and
    2. (b) net positions in different types of contracts with the same commodity as underlying or different types of derivative contracts with the same emission allowance as underlying cannot be netted against each other.
  6. (6) The capital employed for carrying out the main business of a group is the sum of the total assets of the group minus its short-term debt as recorded in its consolidated financial statements of the group at the end of the relevant calculation period.
01/01/2027G

The capital employed for carrying out the main business of a group, to which MAR 10A.3.3R(6) applies, relates to the worldwide activities of group members, wherever located.

Point In Time
01/01/2027