ICMA, ISDA, AFME and EBF: Joint Paper Supports EC MiFIR PTT Proposals and Asks for More
Credit: International Banker
The capital markets industry backs the European Commission's proposed carve-outs from post-trade transparency obligations but argues the proposal is too narrow and should extend across the full scope of ESMA's 2020 Opinion.
Context:
On 7 April 2026, ICMA, jointly with ISDA, AFME, and the European Banking Federation (EBF), published a briefing paper on proposals relating to post-trade transparency (PTT) under the Markets in Financial Instruments Regulation (MiFIR), as contained in the European Commission's Market Integration and Supervision Package (MISP). The MISP is the Commission's package of targeted capital markets reforms under the Savings and Investment Union strategy.
Post-trade transparency under MiFIR requires investment firms and trading venues to make the details of transactions in bonds, derivatives, and structured finance products public in near-real-time or after a defined deferral period. The regime was designed to improve price discovery and investor protection, but its application to OTC derivatives traded on third-country venues has been widely criticised as creating a compliance burden and market fragmentation without achieving the underlying transparency objective because third-country OTC derivatives markets operate under their own transparency regimes that already provide adequate price information.
The ESMA Opinion of July 2020 ('Determining third country trading venues for transparency under MiFID II/MiFIR') had previously identified specific categories of third-country derivatives transactions that should be excluded from EU post-trade transparency obligations on equivalence grounds. The Commission's MISP now proposes to formally disapply PTT requirements for OTC derivatives concluded on certain third-country trading venues, implementing the ESMA Opinion in primary legislation.
Rules and Guidelines:
The joint paper supports the Commission's proposal to disapply PTT requirements for OTC derivatives on specified third-country trading venues, and provides supporting arguments drawing on the liquidity benefits of harmonised global OTC derivatives markets. The associations argue that applying EU post-trade transparency requirements to transactions where equivalent transparency already exists in the third-country regime creates duplicative compliance costs, fragments liquidity, and reduces EU market-makers' ability to compete in global derivatives markets.
However, the joint paper asks the Commission and co-legislators to be more ambitious. Specifically: (i) extend the scope of the proposed carve-out to the other asset classes (bonds, structured products) that benefit from the exemption under ESMA's 2020 Opinion, and not limit it to OTC derivatives; and (ii) apply the carve-out to transactions executed away from trading venues and made public on suitably qualified third-country Approved Publication Arrangements (APAs), as well as those executed on third-country trading venues. The current MISP proposal is narrower than the full scope of ESMA's Opinion, and the associations argue that this narrower scope leaves market fragmentation risks intact for the excluded categories.
The paper also supports the EC's proposal to remove forward rate agreements (FRAs) and basis swaps from the scope of public transparency requirements, given their predominantly institutional, illiquid nature and the low investor protection benefit of their public disclosure.
Businesses Affected:
EU-regulated investment banks, broker-dealers, and market-makers active in OTC derivatives, fixed income, and structured products for whom the PTT carve-out directly reduces compliance burden.
Trading technology and reporting teams responsible for MiFIR post-trade transparency reporting need to understand the scope of any final carve-out to update reporting systems and APA relationships.
European and global derivatives associations and their legal teams are monitoring the MiFIR review legislative process.
UK firms with EU subsidiaries active in OTC derivatives markets, who are affected by EU PTT rules through their EU-authorised entities.
Next Steps:
Monitor the MISP legislative process. The Commission's proposal is at an early stage; the European Parliament and Council will negotiate the final scope of any PTT carve-out. Final text is unlikely before 2027.
Engage through your trade association to support the wider scope requested in the joint paper, the extension of the carve-out to bonds and structured products and to APA-published transactions.
Review your firm's third-country OTC derivatives trading flow to identify the transactions that would benefit from the proposed carve-out. This analysis will inform both your consultation response and your system change planning.
Track ESMA's work on RTS 2 amendment for bond post-trade deferrals in parallel, this is the complementary transparency reform for the bond market and is at a more advanced stage than the MISP derivatives proposals.
Source | ICMA | Joint Trade MiFIR
