On July 29, 2021, ISDA published a paper on the pre-trade and systematic internalisers (SIs) regimes for over-the-counter (OTC) derivatives that looks at the role played by financial firms regulated as SIs in the OTC derivatives markets and whether the new regime introduced in 2018, including its price transparency elements, has delivered in practice for market participants and end users of derivatives.

Attractiveness of EU derivatives markets and availability of liquidity in euro derivatives largely depend on access by end users to all instruments, and having a well-functioning SI regime in OTC derivatives is fundamental for that attractiveness. This paper aims to highlight why liquidity providers acting as SIs in OTC derivatives markets are essential to EU clients seeking hedging tools and how this essential role requires a specific approach to the pre-trade transparency regime applicable to SIs.