ESMA · ESMA_QA_1516 Answer Published

Economically Equivalent OTC contracts

Regulation
Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Secondary Markets
Topic
Position limits
Submitted
2016-12-19
Answered
2016-12-19
Browse MiFID Register → More Q&As on this regulation →

Question

What is a lot in the case of Economically Equivalent OTC contracts (EEOTC)?

Answer

[ESMA 70-872942901-36 Commodity derivatives Q&A, Q&A 2.3] A significant number of OTC contracts are specified by reference to a quantity of the underlying commodity and not the standardised lot sizes of an exchange-traded derivative. Where an OTC contract is not defined in standardised lots the size of the contract should be calculated as a multiple of the standard unit of trading used by the trading venue for the commodity derivative to which the OTC contract is equivalent.
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This Q&A is published by European Securities and Markets Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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