MIFID II: ESMA Trading Obligation

Mifid ii trading obligation fixed income

Mifid ii trading obligation fixed income

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The CFTC MAT table distinguishes between Spot starting par swaps, IMM Swaps, MAC Swaps, none of which has been possible for ESMA to do with TR data.

ESMA clarifies trading obligation for shares under MiFID II

The register for classes of derivatives declared subject to the trading obligation is published and maintained by ESMA on its website.

Trading obligation for derivatives - Emissions

The above decisions do not affect the ability of EU counterparties to continue to trade on any CFTC-authorized SEF or DCM with respect to those derivatives which are not subject to the EU&rsquo s trading obligation.

Hence, ESMA has provided interpretational direction which removes some of the potential wide reaching territorial ambit of the share trading obligation ( Deutsche Bank, MiFID II: Share Trading Obligation ). 


- US counterparties can comply with the CFTC&rsquo s trade execution requirement, by executing swaps subject to that requirement on MTFs or OTFs that have been exempted by the order (these MTFs and OTFs also would be able to offer trading in swaps that are not subject to the CFTC&rsquo s trade execution requirement to US counterparties).

ESMA however has access to the private data reported to European Trade Repositories and so has a much deeper insight lets see what it gleaned from this data.

There are also requirements on persons with proprietary rights in benchmarks to ensure that CCPs and trading venues are permitted access to relevant price and data feeds and information on composition, methodology and pricing for the purposes of clearing and trading and licences on a fair, reasonable and non-discriminatory basis. Access must be given on a reasonable commercial basis and taking into account the price at which access is granted on equivalent terms to other CCPs and trading venues. Different prices can only be charged where objectively justifiable.

- GFI Brokers Limited (OTF),
- ICAP Global Derivatives (MTF),
- ICAP Securities (OTF),
- ICAP WCLK (MTF),
- iSWAP (MTF),
- NEX SEF Limited (MTF),
- Sunrise Brokers LLP (OTF),
- Trad-X (MTF),
- Tradeweb Europe Limited (MTF),
- Tradition (OTF),
- Tullett Prebon Europe (OTF),
- Tullett Prebon Europe (MTF).

ESMA have done a good job with the EUR data available to them. Their sample size is still somewhat smaller than we would expect. Given EUR and USD swap markets are similar sizes, we would expect the true picture of EUR IRS markets to cover around 75,555 spot starting swaps over a six month period.


- Commission Implementing Decision of 76 December 7567 on the equivalence of the legal and supervisory framework applicable to stock exchanges in Switzerland in accordance with Directive 7569/65/EU of the European Parliament and of the Council.

It needs regulations on trading obligations to be consistent between the EU, US and other jurisdictions.

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