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
Latest
SwapsInfo Full Year 2024 and Q4 2024
Interest rate derivatives (IRD) trading activity increased in 2024, driven by interest rate volatility, adjustments in central bank policies and shifting market expectations on inflation and economic growth. Index credit derivatives also saw increased activity, as measured by traded notional,...
ISDA Response on UK MIFID Transaction Reporting
On February 14, ISDA submitted a response to the UK Financial Conduct Authority’s (FCA) discussion paper 24/2 on improving the UK transaction reporting regime under the UK Markets in Financial Instruments Directive (MIFID) framework. The FCA indicated it is making...
Saudi Capital Markets Event Welcome Remarks
Capital Markets & the Kingdom of Saudi Arabia February 19, 2025 Opening Remarks Scott O’Malia ISDA Chief Executive Good morning, everyone. I’d like to add my thanks to Saudi Tadawul Group for working with us on this event, as...
Appropriate Capital Regs Needed for Liquid Markets
The Basel III capital framework was designed to strengthen the regulation, supervision and risk management of banks in response to weaknesses exposed by the global financial crisis. As the last components of the framework are finalized and implemented around the...