On July 20, ISDA submitted feedback to the European Securities and Markets Authority (ESMA) on draft Level 3 guidance on several technical issues caused by the interaction of the recently adopted regulatory technical standard on derivatives transparency (RTS 2) and its annex, and Commission Delegated Regulation (EU) 2025/1003 on identifying reference data for over-the-counter (OTC) derivatives subject to transparency under the Markets in Financial Instruments Regulation. ESMA had sought feedback from stakeholders on the draft guidance, which attempts to address the key outstanding issues identified in ISDA’s letter to ESMA and the European Commission on May 27, several of which would materially impact the effectiveness of OTC derivatives transparency and the consolidated tape for derivatives.

ISDA’s latest feedback is consistent with the proposed solutions it identified in its earlier letter. ISDA also proposed a solution to a previously unidentified issue that would have severely impacted the value of credit default swaps transparency.

ESMA has noted that the final guidance can only be published after the publication of the regulation amending RTS 2 in the Official Journal of the EU, expected around November 2026. To assist with market participants’ preparation for the application of the revised transparency framework in March 2027, ESMA is considering the publication of the guidance in draft form with the necessary caveats as soon as possible after it concludes its internal approval process.