ISDA has published a paper recommending that the EU and the UK recognize the equivalence of each other’s derivatives trading venues in order to mitigate the impact of the UK’s withdrawal from the EU. If appropriate equivalence decisions are not in place by the end of the transition period provided for in the Withdrawal Agreement between the EU and the UK (the transition period), there will be significant issues for counterparties subject to the derivatives trading obligation (DTO) and other requirements under derivatives legislation in both the EU and the UK. The lack of such equivalence decisions is also likely to exacerbate the fragmentation of liquidity in over-the-counter (OTC) derivatives markets between the EU and the UK resulting from Brexit.
The paper explains that equivalence is the best solution for addressing conflicts and avoiding such fragmentation, by setting out the limitations of the other mitigating actions that have been proposed in the event that equivalence is not granted.
Click on the attached PDF to read the letter in full.
Documents (1) for ISDA Analysis of the Impact of Brexit on the MIFID Derivatives Trading Obligation
Latest
Credit Derivatives Trading Activity Q2 2025
This report analyzes credit derivatives trading activity reported in Europe. The analysis shows European credit derivatives transactions based on the location of reporting venues (EU versus UK) and product type. The report also compares European-reported credit derivatives trading activity to...
ISDA Trading and Treasury Forum: CEO Remarks
ISDA Derivatives Trading and Treasury Forum London, September 16, 2025 Opening Remarks Scott O’Malia ISDA Chief Executive Officer Good morning, and welcome to the ISDA Derivatives Trading and Treasury Forum. Thank you to CME Group for partnering with us...
Recognition of Cross-product Netting is Critical
US regulators are in the process of making important changes to the regulatory capital framework by proposing modifications to the enhanced supplementary leverage ratio, which should help stop it from acting as a non-risk-sensitive constraint on bank capacity – a...
ISDA, GFXD Response to FCA on SI Regime
On September 10, ISDA and the Global Foreign Exchange Division (GFXD) of the Global Financial Markets Association responded to the Financial Conduct Authority's (FCA) consultation paper CP25/20 on the systematic internalizer (SI) regime for derivatives and bonds. ISDA and the...