CP24/14: Consultation on the derivatives trading obligation and post-trade risk reduction services

Read CP24/14 (PDF)[1]

Why we are consulting

This consultation supports our commitment to strengthen the UK’s position in wholesale markets, as outlined in our Business Plan[2].

Our proposals aim to improve the UK’s regulation of secondary markets, reduce systemic risk in derivatives markets and avoid fragmentation and disruption for firms trading over-the-counter (OTC) derivatives subject to the DTO.

Who this applies to

This consultation will primarily be of interest to: 

• Providers of post-trade risk reduction services
• Trading venues which admit to trading or trade derivatives
• Investment firms and banks dealing in derivatives 
• UK branches of overseas firms undertaking investment services and activities

Our proposals will also interest Approved Publication Arrangements (APAs), central counterparties (CCPs), law firms, consultancies and their related trade associations.

Next steps

This consultation has now closed. 

We will publish feedback on responses and issue a Policy Statement once we have reviewed your comments.

Background

This CP is part of the Wholesale Markets Review (WMR)[3] we have been conducting alongside the Treasury since 2021.

The Financial Services and Markets Act 2023 (FSMA 2023)[4] amended parts of UK MiFIR (onshored Regulation (EU) on Markets in Financial Instruments Regulation, to give us the necessary powers to deliver the reforms set out in the WMR.