ESMA Consultation on Trading Obligation for Derivatives Under MiFIR
ESMA proposed technical standards specifying the trading obligations for derivatives under the Markets in Financial Instruments Regulation (MiFIR). Trading obligation under MiFIR will move over-the-counter (OTC) trading in liquid derivatives onto organized venues, thus increasing market transparency and integrity. MiFIR, which implements parts of the second Markets in Financial Instruments Directive (MiFID II) framework, outlines the process for determining derivatives that should be traded on-venue.
This consultation includes liquidity analysis for interest rate derivatives and Index Credit Default Swap (CDS), based on a dataset covering the second half of 2016, including the proposal on which derivatives should be made subject to the trading obligation. The consultation also contains the proposal on how to phase-in the trading obligation for derivatives and the approach for the instrument register to be maintained by ESMA for the trading obligation, along with a high-level cost-benefit-analysis. ESMA will use the feedback received to finalize these standards and send the finalized standards to the EC for endorsement.
Related Link: Consultation and Response Template
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