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 the derivatives consolidated tape.

In the response, ISDA argues against ESMA’s proposal to use a modified ISIN as the identifier for those over-the-counter (OTC) derivatives in scope for transparency, and reiterated its longstanding view that the unique product identifier is the correct identifier for OTC derivatives.  The response also strongly opposes the assessment of single name credit default swaps (CDS) referencing global systemically important banks (G-SIBs) as liquid, and proposes a modified deferral framework for these contracts.  It shows that the proposed price deferral for index CDS referencing iTraxx Senior Financials and iTraxx Subordinated Financials is insufficient, and proposes new price deferral lengths based on implied trade-out time.

The response generally supports the deferral framework for interest rate derivatives, but notes that any benefit gained from the inclusion of basis swaps, forward rate agreements and forward starting swaps is disproportionate to the effort of including them, due to the very small numbers of these instruments that will be in scope of transparency under MIFIR.

Documents (1) for ISDA Response to ESMA MIFIR Review Consultation

Paper on Liquidity Assessment for Single-name CDS

On September 5, ISDA submitted a paper to the European Securities and Markets Authority (ESMA) and the European Commission in support of its earlier response to ESMA’s Markets in Financial Instruments Regulation (MIFIR) review consultation package 4 (CP4) on transparency...

Response to EC on Delegated Regulation

On September 4, ISDA responded to the European Commission’s (EC) consultation on amendments to delegated regulation (EU) 2017.567. The key area of interest for ISDA was the proposed insertion of a new article 16a that establishes what constitutes a post-trade...

Raising Clients’ Awareness on Portability

Clients accessing a central counterparty (CCP) via a client clearing service provider (CCSP) for over-the-counter (OTC) and exchange-traded derivatives should consider what may happen to their positions and collateral in a scenario in which the CCSP defaults. While regulatory regimes...

Response to FCA on Ancillary Activities Test

On August 28, ISDA and FIA submitted a joint response to the Financial Conduct Authority’s (FCA) consultation paper CP25/19 on the ancillary activities test to determine if commercial users or producers of commodities that trade in commodity derivatives, emission allowances...