Trading obligation does not apply to non-par swaps

Category: Legal Alert

 

On 28 March 2018 in the answer to the Question 12 (non-equity transparency, Questions and Answers on MiFID II and MiFIR transparency topics, ESMA70-872942901-35) ESMA explained that the trading obligation for derivatives as specified in Commission Delegated Regulation 2017/2417 does not apply to non-par swaps.

 

 

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Non-equity transparency, Question 12, Questions and Answers on MiFID II and MiFIR transparency topics, ESMA70-872942901-35  

 

Commission Delegated Regulation (EU) 2017/2417 of 17 November 2017 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the trading obligation for certain derivative

 

 

According to the ESMA, the trading obligation for derivatives only applies to interest rate swaps as specified in table 1-3 of the said Regulation that are traded at par.


Non-par swaps, including swaps traded at market-agreed-coupon (MAC), are currently not subject to the trading obligation for derivatives.