Regulations The financial market has experienced several new regulations the recent years. From January 3rd 2018 MiFID II was included in the laws and regulations in EU and EEA. The content in the below text has been emailed to Fish Pool members directly during winter 2017/2018 and provides a brief introduction to MiFID II. Note: The content of this text is not considered legal advice and is intended only as information from Fish Pool. Do not hesitate to contact Fish Pool if you have any questions regarding the regulations. All Fish Pool Trade Members must: Present a LEI number (Legal Entity Identifier: a unique, global company identification number) for the company with a membership with Fish Pool. These are also needed for bank transactions like currency trading etc. Fish Pool needs these to identify the companies in the authority reports. From 2018, no companies can place orders, enter trades or hold positions unless Fish Pool holds this identification. Send Fish Pool personal identification codes for Responsible persons and all other traders. Fish Pool needs these to identify the traders in the authority reports. From 2018, no traders can place orders or enter trades unless Fish Pool holds this identification. Hedge or speculation As of January 3rd 2018 Fish Pool must report all positions entered by trade members to the government. In the future, Team Fish Pool will always ask the purpose of an order or trade you place with Fish Pool. The purpose can be Hedge (risk reducing) or Speculation. Annual notification to Competent Authorities The new regulation puts limits to the companies trading financial products, such as Fish Pools financial salmon contracts. All companies trading the products must either: Be licenced as a financial company or Notify the Competent Authority in your home country annually that your trading in financial salmon contracts is something you do in addition to your company’s main business (the financial contracts are ancillary activity) before April 1 each year. Regarding bullet number 2 above: Ancillary activity is activity other than the core activity in the company. For practical purposes, companies in the value chain of salmon, farmers, exporters, importers, VAP and HoReCa normally use Fish Pool contracts as ancillary activity. You must send the notification to the Competent Authority in your company’s home country. The different Competent Authorities may request the notification in a specific way. Competent Authority may request a calculation of your Fish Pool contracts being ancillary. In such a case, Fish Pool will do our best to help you. Do not hesitate to contact us if you want more detailed information on this regard. Notification deadline: 31 March every year. Position limits The Financial Supervisory Authority of Norway has set limits to the number of open positions a company and a group of companies can hold in Fish Pool contracts. One limit is set for spot month contracts (the contract next to expiry) and one limit is set at the net position across all other contract months. The limits was set at above 20 000 tonnes (at company and group level) in January 2018. The limits may be updated. Salmon companies that use financial contracts as hedging of physical production may apply for exemptions from the position limits to the Financial Supervisory Authority of Norway. When an exemption is granted, all positions marked as hedging (see topic above) will be removed from the calculated position and only speculative positions will be included in position limit. Fish Pool report positions for all trade members daily. The Financial Supervisory Authority of Norway aggregate positions in a group and all companies in the group must comply individually and collectively. Each position holder (i.e. every member of Fish Pool) must apply for exemptions. This also applies in cases where it is the group’s aggregated position, not the position of each member, which is high. The Financial Supervisory Authority of Norway has made the form “Commodity Position Limits Exemption application” available at this webpage https://www.finanstilsynet.no/tema/mifid-ii–mifir/varederivater-i-mifidii-forskriften/ for companies that will apply for the exemption.