Demystifying Derivatives Trading in the EU

This paper examines the dynamics of derivatives trading in the EU. It analyzes transactions executed on and off trading venues (TVs), such as multilateral trading facilities and organized trading facilities. The analysis considers why some transactions outside the scope of the derivatives trading obligation are executed on TVs.

The paper also explores the composition of transactions executed by systematic internalizers (SIs) and describes the role SIs play in the market, both as liquidity providers to clients and on TVs, where they are commonly referred to as market makers or dealers.

The analysis is based on European data collected by ISDA from 30 European approved publication arrangements (APAs) and TVs in the fourth quarter of 2021. EU interest rate derivatives (IRD) trading activity is measured by IRD traded notional reported by APAs and TVs located in the EU. Of the 30 APAs and TVs included in the ISDA database, 13 are located in the EU.

Documents (1) for Demystifying Derivatives Trading in the EU

ISDA response to ESMA MiFIR Review Consultation

On July 11, ISDA submitted a response to the European Securities and Markets Authority's (ESMA) fourth package of Level 2 consultation under the Markets in Financial Instruments Regulation Review (MiFIR), on transparency for derivatives, package orders and input/output data for...

ISDA Presents Lock-Up Agreement Proposal

ISDA is pleased to present the proposed Lock-Up Agreements and CDS – Proposed Auction Solution. “Lock-Up Agreements” are market-wide arrangements, broadly standardized and predominantly integrated with court sanctioned restructuring or bankruptcy processes. Numerous end users will sign material Lock-Up Agreements...