About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

ISDA Comments on EC’S MiFID Proposals

Subscribe to our newsletter

The International Swaps and Derivatives Association, Inc. (ISDA) welcomes the publication by the European Commission of legislative proposals relating to its review of the Markets in Financial Instruments Directive (MiFID).

The overarching objective of the original MiFID framework was to further the integration, competitiveness and efficiency of European financial markets, and ISDA supports changes that build on that goal, including the introduction of a well calibrated post-trade transparency regime for OTC derivatives.

ISDA is concerned, however, that the European Commission’s stance on organised trading of OTC derivatives goes well beyond the spirit of the September 2009 G20 commitment that OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate.

In particular, the European Commission proposes certain restrictions on Organised Trading Facilities that will hurt end user choice and market liquidity. These restrictions would, in essence, limit the types of trades that can be transacted on single dealer platforms and would adversely affect the ability of firms to effectively manage their risks.

Conrad Voldstad, ISDA Chief Executive Officer, said:  “OTC derivatives trade infrequently. For example, only 3,600 interest rate swaps are traded each day globally and only half of these are sufficiently standardized to be cleared.  In all, we think less than 1,000 interest rate swaps will be traded in Europe on Organized Trading Facilities. Half of these may be interdealer trades and the balance will be divided across hundreds of infrequently traded contracts with different maturities. These trades depend on the ability of dealer firms to make markets, particularly given the large trade size of most interest rate swaps. If you want to protect end users’ ability to access these markets, then you need a suitable range of venues on which to trade; limiting what you class as an eligible trading platform for OTC derivatives is not a good move.” By way of comparison, around 1 million orders are executed every day on the London Stock Exchange.

ISDA will continue to engage with the European Commission, as well as other as policymakers within the European Parliament and Council of Ministers over the coming months on the topic of MiFID, in support of a legislative framework that advances ISDA’s commitment to safe, efficient markets.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Best practices for creating an effective data quality control framework

Data quality is critical to capital markets processes from identifying counterparties to building customer relationships, regulatory reporting, and ultimately improving the bottom line. It can also be extremely difficult to achieve. One solution is a data quality control framework that includes an automated and systematic process that monitors the state of data quality and ensures...

BLOG

Sikoia Secures $6 Million Funding to Accelerate Growth of Client Onboarding Platform

Sikoia, provider of a unified data platform for client onboarding and counterparty evaluation, has secured $6 million in seed funding, bringing total capital raised to over $8.3 million. The London-based company will use the funding to accelerate international expansion, extend the platform’s data coverage and workflow automation, and develop unique technology to help its clients...

EVENT

ESG Data & Tech Briefing APAC

Join us in one of the greenest cities in the world as we bring together thought leading ESG specialists to explore how financial institutions are adapting to the evolving ESG regulatory and market infrastructure.

GUIDE

Regulatory Data Handbook 2022/2023 – Tenth Edition

Welcome to the tenth edition of A-Team Group’s Regulatory Data Handbook, a publication that has tracked new regulations, amendments, implementation and data management requirements as regulatory change has impacted global capital markets participants over the past 10 years. This edition of the handbook includes new regulations and highlights some of the major regulatory interventions challenging...