Proposed changes Draft
The draft Regulation in line with G20 commitments requires:
Trading of standardised OTC derivatives on exchanges or electronic trading platforms where appropriate
- All trading in classes of derivatives which are subject to the trading obligation in the draft Regulation (and listed in a register maintained by ESMA) will be required to move to either:
The requirement to trade derivatives on a trading venue applies to financial counterparties and certain non-financial counterparties (equivalent to those subject to clearing obligations under EMIR). There are avoidance measures which catch counterparties outside the EU who would have been subject to the obligation had they been EU entities.
ESMA will prepare technical standards to determine which classes of derivatives subject to the clearing obligation under EMIR should be subject to the trading obligation. These technical standards will consider whether a class of derivatives is sufficiently liquid, taking into account the average frequency of trades, size of trades, number of trades and type of active market participants.
- Derivatives declared subject to the trading obligation shall be eligible for trading on any trading venue on a non-exclusive basis.