Policy paper

Ancillary Activities Exemption – Draft Legislation

The government is publishing a draft of the statutory instrument amending the UK’s Ancillary Activities Exemption.

• From: HM Treasury
• Published: 3 July 2025

Documents

Ancillary Activities Exemption: Policy Note

PDF, 107 KB, 16 pages

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Ancillary Activities Exemption Draft Statutory Instrument

PDF, 150 KB, 5 pages

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Details

The Ancillary Activities Exemption (AAE) allows firms to trade in commodity derivatives and emissions allowances without having to be authorised as an investment firm by the FCA. To assess whether they are eligible for the AAE, firms need to perform the Ancillary Activities Test. As part of the Wholesale Markets Review, the Treasury committed to revoking the existing ancillary activities test and replacing it with a new, simplified version. This instrument will provide the FCA with the necessary powers to put in place a replacement test, tailored to the UK’s markets.

This near-final draft statutory instrument, along with an accompanying explanatory policy note, sets out how the government plans to deliver on this commitment. The government invites any technical comments by 28 August 2025 and can be contacted at Capital.Markets@hmtreasury.gov.uk.

Published 3 July 2025