The European derivatives market remains uncertain about incoming transparency and reporting requirements under the region’s furthest-reaching piece of financial regulation yet.
The Markets in Financial Instruments Directive (Mifid) II and its accompanying regulation (Mifir), effective as of January 2018, introduces extensive reporting and transparency obligations on certain types of instruments, expanding the existing rules for equities to other asset classes.
Whether or not an instrument is to be reported depends on if it is traded on a trading venue (TOTV), or materially similar to another instrument that is.
As many bilateral over-the-counter (OTC) derivatives replicate transactions that are TOTV, they are likely to be in scope. But further regulatory guidance issued in May has only added to the uncertainty.
The European Securities and Markets Authority (Esma) confirmed the fears of many in the industry when it clarified that the maturity date...