ISDA Responds to FCA Consultation on Derivatives Transparency
Summary
ISDA has responded to the UK Financial Conduct Authority's (FCA) consultation CP26/8 regarding transparency requirements for financial instruments. The response supports a proposed change to MAR 11 to resolve a discrepancy between OTC derivatives in scope for public transparency and the permissible CFI codes.
What changed
ISDA has submitted a response to Chapter 3 of the UK FCA's Quarterly Consultation CP26/8, which addresses transparency requirements for financial instruments under MAR 11. The consultation proposed a change to resolve a discrepancy between the over-the-counter derivatives subject to public transparency and the Classification of Financial Instruments (CFI) codes used for reporting. ISDA supports this proposed change, which aligns with a solution previously suggested by ISDA members.
This action indicates a move towards clarifying derivatives transparency rules in the UK. While this document is a response to a consultation and not a final rule, it signals the FCA's intent to amend MAR 11. Compliance officers should monitor the FCA's subsequent policy statement for confirmation of the change and any effective dates. The proposed change aims to ensure accurate reporting of derivatives trades.
What to do next
- Monitor FCA's policy statement for confirmation of MAR 11 amendments.
- Review internal processes for CFI code usage in derivatives transparency reporting.
Source document (simplified)
- Public Policy
- Europe
- ISDA Responds to FCA CP26/8 on CFI Codes for Derivatives Transparency
ISDA Responds to FCA CP26/8 on CFI Codes for Derivatives Transparency
On March 19, ISDA responded to Chapter 3 of the UK Financial Conduct Authority’s (FCA) Quarterly Consultation CP26/8 on transparency requirements for financial instruments under Market Conduct Sourcebook (MAR) 11.
Sections 3.11-3.13 of the consultation paper explain a discrepancy between the over-the-counter derivatives in scope of public transparency and the Classification of Financial Instruments (CFI) codes permissible when making trades transparent, and propose a change to Note 1 of Annex 1 of MAR 11 to resolve that discrepancy.
The related question (Q3.3) asks respondents if they agree with the proposed change. ISDA members identified this discrepancy after the FCA’s policy statement PS 24/14 was published, and the FCA’s proposed change mirrors the solution ISDA suggested to the FCA at that time. ISDA’s response therefore supports the change proposed by the FCA.
Tags:
Financial Conduct Authority (FCA), Regulation, Transparency, UK
Documents (1)
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