AIC at 20: Winning crucial exemption from EU financial control requirements
As AIC marks 20 years as the UK agri-supply industry’s leading trade association, we're looking back at some of its greatest achievements since it was founded in 2003.
Each week throughout 2023, we’ll explore a major achievement where AIC represented its Member businesses, promoted the benefits of modern commercial agriculture in the UK, and supported collaboration throughout the food chain.
This week, we explore how AIC won vital concessions from the EU to mean that its grain trading Member businesses did not need to comply with impending financial control legislation in 2017.
Intense negotiation
Almost a decade ago, plans to introduce additional regulation on the use of financial instruments in the EU, including the agricultural commodity sector, threatened aspects of current industry risk management, including forward contracts.
Intense negotiation between AIC, the industry, and regulators, the European Securities and Markets Authority (ESMA) on the detailed implementation of the legislation followed.
Working on behalf of its Members in the Grain and Oilseeds sector, which includes grain trading businesses, in 2015 AIC achieved its primary ambition to get the ESMA to accept that forward physical contracts should not be classed as financial instruments.
AIC's work encompasses three guiding pillars - Productivity, Environment, and Competitiveness - delivering for sustainability and contributing to the circular economy. Find out more here.
In 2016, AIC Committee Members had several meetings with the Financial Conduct Authority (FCA) to discuss not only the wider legislation, but also how it was to be implemented in the UK.
Exemption offered
Ultimately, AIC Member businesses were allowed to register for exemption from this new EU legislation. Gaining this exemption for Members was a crucial step towards retaining the current range of risk management tools that the sector has at its disposal.
Being within the scope of this financial legislation would have meant considerable additional costs for UK grain trading businesses, and could have led to the removal of certain tools from the marketplace.
Watch the video below to find out more about AIC and the Grain and Oilseed arable marketing sector.
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Visit the AIC at 20 webpage for more content like this.
Authors
Oli Hill
As Head of Communications, Oli creates and oversees the content published on AIC's website, emails, Member briefings, print publications, and social media. A qualified multimedia journalist, he previously spent six years working at Farmers Weekly magazine as a Senior Reporter on the arable team, and latterly as Community Editor. More recently he was Communications Manager at Red Tractor.
Rose Riby
Rose Riby is Head of Combinable Crops and Seed. Having worked across these sectors for many years, she has a depth and breadth of experience in roles in grain trading, plant breeding and knowledge exchange at AHDB.
