BDEW: MiFID Reform May Lead to Applicability of Capital Requirements Directive for Energy Traders

This week, the European Commission proposed to tighten the Capital Requirements Directives (CRD). The Federal Association of the Energy and Water Industry (BDEW) warned that energy traders might be affected in the future, as a planned reform of the Markets in Financial Instruments Directive (MiFID) might make energy trading companies financial services providers that are subject to supervision.

“If the Commission’s proposals were implemented, energy companies would be required to maintain a much higher level of equity as today for the trade in electricity and gas as well as CO2 emission allowances”, Hildegard Müller, head of BDEW pointed out. This would disproportinately tie-up capital and affect business. Besides, it would be a market barrier for new entrants and reduce capital for important investments in renewable energy sources, new conventional power plants and networks. Industrial companies differed from banks insofar as their capital was tied-up in fixed assets, Mrs Müller said.

BDEW has been advocating for a tailor-made legal framework for the energy sector and such a regulation, the Regulation on Energy Market Integrity and Transparency (REMIT), was on the point of being passed, BDEW says. “We therefore ask the European Commission, the European Parliament and the European Council to retain the existing rules for the energy trade”, Mrs Müller said, pointing out that BDEW wanted to lobby for rules that also allowed small and middle-sized companies to continue trading.

Source: BDEW

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