REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the need to temporary exclude exchange-traded derivatives from the scope of Articles 35 and 36 of the Regulation (EU) No 600/2014 on markets in financial instruments
Date: 2017-09-11
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: EU office or agency, equal treatment, financial instrument, financial legislation, financial transaction, market supervision, stock exchange

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 11.9.2017  COM(2017) 468 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the need to temporary exclude exchange-traded derivatives from the scope of Articles 35 and 36 of the Regulation (EU) No 600/2014 on markets in financial instruments  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 

THE COUNCIL 

on the need to temporary exclude exchange-traded derivatives from the scope of Articles 
35 and 36 of the Regulation (EU) No 600/2014 on markets in financial instruments 

1. 

INTRODUCTION 

This report to the European Parliament and to the Council ('Report') provides an assessment 
of  the  need  to  temporarily  exclude  exchange-traded  derivatives  ('ETDs')  from  the  scope  of 
Articles 35 and 36 of the Regulation (EU) No 600/2014 on markets in financial instruments 
('MiFIR').  Under  Article  52(12),  the  European  Commission  is  required  to  report  to  the 
European Parliament and to the Council on the need to temporarily exclude ETDs from the 
non-discriminatory  access  provisions  to  central  counterparties  (hereinafter  "CCP")  and 
trading venues under Articles 35 and 36 of MiFIR for up to thirty months following 3 January 
2018.  

Article 52(12) of MiFIR provides that the European Commission should base its Report on a 
risk  assessment  carried  out  by  ESMA  in  consultation  with  the  ESRB  and  shall  take  into 
account  the  risks  resulting  from  open  and  non-discriminatory  access  provisions  regarding 
ETDs to the overall stability and orderly functioning of the financial markets throughout the 
Union. On July 2015, the Commission asked ESMA in collaboration with ESRB to carry out 
such a risk assessment. ESMA delivered its risk assessment1 on 31 March 2016 based on an 
ESRB opinion published on 9 February 20162. 

In  carrying  out  its  risk  assessment,  ESMA  was  asked  by  the  Commission  to  (i)  identify 
potential risks factors and assess their likelihood, as well as  the magnitude of the damaging 
effects  on  financial  systems;  (ii)  assess  the  existence  of  systemic  risk  on  the  basis  of  risk 
factors  which  can  be  deemed  specific  to  access  arrangements  pursuant  to  MiFIR,  and  (iii) 
include detailed qualitative and quantitative analysis supporting its arguments. 

The Commission takes note that given the absence of data on operating access arrangements 
for ETDs under MiFIR, ESMA was unable to conduct a quantitative assessment as requested 
by the Commission. 

1 ESMA,  Risk Assessment on the temporary  exclusion of exchange-traded derivatives from Articles 35 and 36 
MiFIR, 4 April 2016, https://www.esma.europa.eu/sites/default/files/library/2016-461_etd_final_report.pdf  
2 ESRB response to ESMA on the temporary exclusion of exchange-traded derivatives from Articles 35 and 36 of 
MiFIR, 
2016, 
https://www.esrb.europa.eu/pub/pdf/other/160210_ESRB_response.pdf?b34727f97ef6c1ef3a9fd58f3d67035e  

February 

9 

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2. 

SCOPE OF THE REPORT 

As  in  Regulation  (EU)  No  648/2012  (EMIR)  for  OTC  derivatives,  MiFIR  establishes  a 
clearing obligation for ETDs3 as well as a non-discriminatory and transparent access to CCPs 
and trading venues for transferable securities, money market instruments, and ETDs.  

EMIR defines OTC derivative as a derivative contract not concluded on a regulated market or 
a  third  country  market  considered  as  equivalent  to  a  regulated  market4.  In  contrast,  MiFIR 
defines  ETDs5  as  "a  derivative  that  is  traded  on  a  regulated  market  or  on  a  third-country 
market considered to be equivalent to a regulated market" and as such does not fall into the 
definition of an OTC derivative as defined in EMIR.  

Thus,  where  MiFIR  open  and  non-discriminatory  access  provisions  apply  to  derivatives 
traded at least on a regulated market, the EMIR open access provisions apply to derivatives 
only  traded  OTC,  including  derivatives  traded  on  multilateral  trading  facilities  or  organised 
trading  facilities provided that they are not  otherwise traded on a regulated market or  third-
country market considered to be equivalent to a regulated market. 

According to Article 52(12) of MiFIR, this report only covers ETDs and thus does not include 
transferable securities, money market instruments and OTC derivatives.  

3. 

NON-DISCRIMINIATORY ACCESS PROVISIONS IN MiFIR 

Open  and  non-discriminatory  access  provisions  are  aimed  at  strengthening  competition 
between  trading  venues  and  CCPs,  and  ultimately  reducing  costs  for  end  investors,  by 
preventing  discriminatory  practices  that  may  exist,  both  at  the  CCPs’  and  trading  venues’ 
levels.  

Article  35  of  MiFIR  specifies  that  a  CCP  shall  grant  access  to  trading  venues  on  a  non-
discriminatory  and  transparent  basis  to  clear transactions  regardless  of  the  trading  venue  on 
which  they  are  executed.  In  this  context,  open  and  non-discriminatory  access  is  aimed  at 
ensuring  that  a  trading  venue  has  the  right  to  non-discriminatory  treatment  in  terms  of  how 
contracts traded on its platform are treated in terms of (i) collateral requirements and netting 
of  economically  equivalent  contracts  and  (ii)  cross-margining  with  correlated  contracts 
cleared  by  the  same  CCP.  This  should  give  trading  venues  the  possibility  to  decide  which 
CCP(s) may clear transaction executed on their platforms. 

In parallel, Article 36 of MiFIR specifies that a trading venue shall, upon request, grant access 
to  its  trade  feeds  to  CCPs  that  wish  to  clear  transactions  on  this  trading  venue  on  a  non-
discriminatory and transparent basis. 

MiFIR anticipated however that under certain circumstances open access to CCPs and trading 
venues  may  raise  risks  and  have  potential  drawbacks  that  could  outweigh  the  policy 
objectives of enhanced competition. In that context, Articles 35 and 36 of MiFIR establish the 

3 Article 29(1) of MiFIR. 
4 Article 2(7) of EMIR.  
5 Article 2(32) of MiFIR. 

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conditions under which access may be denied. The competent authorities of the CCP and the 
trading  venue  may  thus  deny  access  to  a  particular  CCP  or  trading  venue  where  granting 
access would (i) threaten the smooth and orderly functioning of the market, in particular due 
to  liquidity  fragmentation,  or  would  adversely  affect  systemic  risk,  or  (ii)  require  an 
interoperability  arrangement  (for  ETD),  except  where  the  trading  venue  and  the  CCPs 
involved have consented to this arrangement and if the risks arising from this arrangement are 
collateralised at a third party6. Furthermore, access may also be denied by CCPs and trading 
venues  where  it  creates  significant  undue  risk  that  cannot  be  managed  based  on  the 
anticipated  volume  of  transactions,  operational  risk  and  complexity  as  well  as  other  factors 
creating significant undue risks7.   

These conditions are detailed in the regulatory technical standard on clearing access in respect 
of trading venues and central counterparties8, which  also covers the conditions under  which 
access shall be granted, the notification procedures and other requirements9. In particular, the 
technical standard further specifies the different type of risks, either based on the anticipated 
volume  of  transactions,  on  the  operational  risk  and  complexity  as  well  as  other  factors 
creating  significant  undue  risks  (e.g.  new  product,  threaten  to  the  economic  viability  of  the 
CCP or the trading venue, legal risk, or incompatibility between trading and clearing rules).  

In  addition,  MiFIR  introduces  specific  provisions  to  adequately  take  into  consideration  the 
complexity of ETDs and the consequent challenges that open and non-discriminatory access 
may entail. In particular, ETDs, are complex due to their long maturities and leverage effects. 

In the case of ETDs, the trading venue or the CCP shall provide a written response within six 
months,  instead  of  three  months  for  other  financial  instruments,  and  make  access  possible 
within three months of providing a positive response to the access request. Where a competent 
authority, the trading venue or the CCP refuses to grant access, it shall provide full reasons of 
its decision and inform the relevant competent authorities. 

MiFIR  also  provides  for  a  transitional  arrangement  for  trading  venues  offering  trading  in 
ETDs with annual notional amount traded below EUR 1 000 000 million10, which may opt out 
from the open and non-discriminatory access provisions for a period of thirty months (and up 
to sixty months under certain conditions11) from the date of application of MiFIR. 

Finally, according to Article 52(12) of MiFIR and subject to the conclusions of this Report, 
the Commission may decide to exclude ETDs from the scope of Articles 35 and 36 of MiFIR 
for a maximum period of 30 months on the basis of a risk assessment carried out by ESMA in 
consultation with the ESRB. Article 54(2) of MiFIR further provides that in the case that the 

6 Articles 35(1), 35(4) and 36(4) of MiFIR. 
7 Articles 35(6)(a) and 36(6)(a) of MiFIR. 
8  Commission  delegated  regulation  of  24  June  2016  supplementing  Regulation  (EU)  No  600/2014  of  the 
European  Parliament  and  of  the  Council  with  regard  to  regulatory  technical  standards  on  clearing  access  in 
respect of trading venues and central counterparties. 
9 See ESMA's mandate to develop draft regulatory technical standards under Articles 35(6) and 36(6). 
10 Article 36(5) of MiFIR. 
11 According to Article 36(5) MiFIR, a trading venue that remains below the EUR 1 000 000 million threshold of 
annual notional amount traded in ETDs during the first thirty months of the opt out period, can benefit from an 
additional thirty months opt out period.  

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Commission decides not to temporarily exclude ETDs from the scope of Articles 35 and 36 of 
MiFIR, a CCP or a trading venue may apply to its competent authority for permission to avail 
itself  of  transitional  arrangements.  The  competent  authority,  may  assess  the  risks  resulting 
from the application of the open and non-discriminatory access as regards ETDs to the orderly 
functioning of the relevant CCP or  trading  venue,  and  may decide that the relevant  CCP or 
trading  venue  be exempted  from the access obligations for a transitional period until  3 July 
2020. 

4. 

ETD's MARKET STRUCTURE 

It should be noted that ESMA's risk assessment was published in April 2016, at the very early 
stage or in advance of the implementation of new regulatory requirements that aim at ensuring 
that  (i)  trading  in  liquid  and  standardised  derivatives  is  carried  out  as  far  as  possible  on 
trading venues and that (ii) both relevant OTC derivatives and ETDs are cleared centrally in 
order to reduce systemic risk.  

Together  with  ESRB,  ESMA  considers  that  the  introduction  of  the  obligation  to  trade  on  a 
trading  venue  under  Article  28  MiFIR  for  OTC  derivatives  that  fulfil  certain  conditions  is 
expected  to  increase  the  number  of  derivatives  traded  on  traded  venues12,  including  on 
regulated markets. Derivatives brought onto regulated markets will therefore be considered as 
ETDs and thus be subject to the obligation to clear ETDs by a CCP in accordance with Article 
29 MiFIR. 

According to ESMA's findings, the European derivatives market is mainly OTC. As of end-
June 2016, the global size of ETDs market was slightly above 10% of the global derivatives 
market  which  itself  follows  a  declining  trend  since  200813.  In  terms  of  notional  amount 
outstanding,  ETDs  market  is  mainly  composed  of  interest  rate  derivatives  (IRD)  split  into 
60% of options and 40% of futures.  

ESMA's risk assessment also highlights a consistency in the significant drop in the percentage 
of daily cleared outstanding notional for ETDs in recent years, with the progressive switch to 
longer-maturity instruments.  

ESMA  further  describes  European  ETDs  market  as  highly  concentrated  both  at  trading  and 
clearing  level,  combined  with  a  vertically  integrated  market  infrastructure  where  dominant 
trading  and  clearing  structures  are  part  of  the  same  integrated  groups.  In  2014,  the  biggest 
CCP  in  terms  of  number  of  ETDs  trades  cleared  held  a  58%  market  share  while  the  three 
biggest  held  together  90%  of  the  market.  A  number  of  smaller  players  share  the  remaining 
market shares.  

12 The trading obligation in Article 28 MiFIR is considered fulfilled if the transaction is conclude on a regulated 
market, but also on Multilateral Trading Facilities and Organised Trading Facilities.  
13 See Bank for International Settlements, Triennial Central Bank Survey - OTC derivatives positions at end-
June 2016, Table 1, Monetary and Economic Department, 11 December 2016, 
http://www.bis.org/publ/otc_hy1612/triensurvstatannex.pdf  

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When assessing the market structure on an asset class basis, ESMA concludes that the market 
is even more concentrated with one exchange holding over 70% of equity ETDs in terms of 
value traded and another holding about 80% of bond ETDs still in terms of value traded.  

The case of commodity ETDs is slightly different – with the exception of energy ETDs – as 
the  commodity  ETDs  market  is  characterised  by  a  high  level  of  specialisation  and  little 
overlap among trading venues and CCPs. 

In parallel, in the OTC market, the ongoing implementation of EMIR clearing obligation has 
already and will continue to bring a significant share of the derivatives contracts traded OTC 
to  central  clearing.  Following  ESMA's  regulatory  technical  standards  under  EMIR,  the 
European  Commission  has  indeed already  adopted  delegated  acts  for the  central clearing  of 
IRS (denominated in UR, GBP, JPY, USD, NOK, PLN  and SEK) and Index Credit Default 
Swaps (CDS) denominated in EUR14, bringing about 70% of the OTC derivatives market in 
these  classes  into  clearing15.  It  should  also  be  noted  that  although  the  clearing  offer  is  very 
concentrated, six different CCPs offer clearing services for IRS. 

The Commission takes note that (i) interest rates derivatives represent the main share of the 
ETDs market; (ii) MiFIR trading obligation might bring into the ETDs definition a part of the 
interest rate derivatives; (iii) EMIR clearing obligation is already applicable to IRS and (iv) 
despite  the  market  concentration  the  interest  rate  derivative  market  is  split  between  six 
different CCPs. The Commission therefore agrees with ESMA's conclusions that interest rate 
derivative  is  the  most  relevant  asset  class  when  assessing  the  consequences  of  the 
implementation of the open and non-discriminatory access provisions for ETDs. 

5. 

RISK  ASSESSMENT  OF  OPEN  AND  NON-DISCRIMINATORY  ACCESS 
PROVISIONS FOR ETDs 

Although  the  open  access  provisions  under  MiFIR  are  not  implemented  yet,  ESMA  reports 
that some EEA CCPs and trading venues have already developed and successfully make use 
of access arrangements for either ETDs or OTC derivatives16. ESMA considers that the access 
arrangements applied by market infrastructures under EMIR provisions17 have not raised any 
noticeable systemic risk so far. This is despite the fact that OTC derivatives are generally less 
standardised and more complex than ETDs. 

14  Commission  delegated  regulation  (EU)  2015/2205  of  6  August  2015  supplementing  Regulation  (EU)  No 
648/2012  of  the  European  Parliament  and  of  the  Council  with  regard  to  regulatory  technical  standards  on  the 
clearing  obligation  ;  Commission  delegated  regulation  (EU)  2016/592  of  1  March  2016  supplementing 
Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical 
standards  on  the  clearing  obligation  ;  Commission  delegated  regulation  (EU)  2016/1178  of  10  June  2016 
supplementing  Regulation  (EU)  No  648/2012  of  the  European  Parliament  and  of  the  Council  with  regard  to 
regulatory technical standards on the clearing obligation. 
15 Progressive implementation started in 21 June 2016; see ESMA's Risk Assessment on the temporary exclusion 
of exchange-traded derivatives from Articles 35 and 36 MiFIR, 4 April 2016, figure 11, p. 10. 
16 See ESMA's Risk Assessment on the temporary exclusion of exchange-traded derivatives from Articles 35 and 
36 MiFIR, 4 April 2016, Table 2, p. 16. 
17 Articles 7 and 8 of EMIR.  

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However, in line with ESMA's assessment, the European Commission is of the view that the 
existing access arrangements for ETDs may still in principle generate risks that could threaten 
the smooth and orderly functioning of markets or adversely affect systemic risk. 

In that perspective, and taking into account ESRB's macroprudential risk assessment, ESMA 
underlines  a  series  of  potential  risks  that  might  arise  from  the  implementation  of  open  and 
non-discriminatory access provisions to ETDs under MiFIR.  

5.1 Risk from open and non-discriminatory access at CCP level 

Open and non-discriminatory access to CCPs will ensure that trading venues will be able to 
have their trades cleared in the CCP of their choice. This is particularly relevant against the 
background  of  the  expected  implementation  of  the  trading  obligation  that  will  bring  many 
OTC derivatives into the scope of the MiFIR open and non-discriminatory access provisions 
and might be accompanied with the entry of new trading venues with no access to vertically 
integrated CCPs. As outlined by ESMA in its risk assessment, trading and clearing costs are 
closely interlinked. The cost of trading on a trading venue is assessed by market participants 
together with the associated clearing costs. A trading venue cannot be competitive if it cannot 
give  access  to  attractive  clearing  costs.  Without  these  provisions,  new  and  non-vertically 
integrated  trading  venues  would  be  prevented  from  entering  the  market  and  thus  unable  to 
promote a more competitive and a less concentrated market. 

Concentration Risk 

Taking these objectives into account, the Commission shares ESMA's views that one of the 
main risks associated with open and non-discriminatory access provisions for ETDs is a new 
concentration  risk  ("single  point  of  failure").  Under  this  risk  scenario,  the  possibility  for 
trading venues to choose their CCP, could lead to a situation where the most attractive CCP 
for  one  specific  ETDs  or  asset  class,  becomes  the  single  place  for  central  clearing.  This 
situation could also arise where, in order to maximise netting efficiency and reduce collateral 
requirements, market participants opt for one single (the biggest) CCP.  

However, given competition and market structure and dynamics, this scenario is unlikely to 
occur. Notably, ESMA reports that such significant shift of clearing to a single CCP would be 
deterred  by  the  risk  that  the  CCP  would  likely  increase  clearing  fees  for  all  its  clearing 
members to a point that it would no longer be attractive to counterparties. In addition, a high 
level  of  concentration  would  expose  the  financial  system  to  a  single  point  of  failure  with 
potential  systemic  consequences  and  the  impossibility  for  market  participants  to  efficiently 
move their positions to another CCP in case of failure. 

The Commission also concurs with ESRB's and ESMA's findings that the clearing market is 
already highly concentrated in the EU, with some ETDs or asset classes being exclusively or 
predominantly  cleared  in  one  CCP.  It  can  even  be  expected  that,  independently  from  the 
implementation of the open and non-discriminatory access provisions, the concentration could 

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be reinforced in the future as a result of "the 'natural' commercial growth of a CCP’s business 
when its services successfully meet the preferences of market participants"18. 

On  the  contrary,  it  could  be  argued  that  the  existing  concentration  can  be  explained  by 
existing  entry  barriers  which  the  open  and  non-discriminatory  access  rules  are  meant  to 
diminish.  In  fact,  where  CCPs  can  request  access  to  trading  venue  under  open  and  non-
discriminatory access provision in MiFIR, this reduces barriers to entry for new CCPs. 

The  Commission  notes  that  EMIR  and  MiFIR  provide  for  safeguards  to  deal  with  this 
concentration  risk.  First,  CCPs  are  regulated  by  the  relevant  competent  authorities  under 
EMIR  which  establishes  organisational  conduct  of  business,  prudential  standards  and 
macroprudential  rules  for  CCPs.  Second,  MiFIR  gives  powers  to  competent  authorities  to 
deny  access  to  CCP  should  it  threaten  the  smooth  and  orderly  functioning  of  markets  or 
adversely affect systemic risk or require an interoperability arrangement. 

Operational risk 

Another important set of risks is that of undue risk that the CCP cannot managed based on the 
anticipated  volume  of  transactions  of  the  trading  venue,  operational  risk  and  complexity  as 
well as other factors creating significant undue risks19. ESMA considers that these risks could 
potentially increase systemic risk by impacting clearing members of other CCPs. 

In this regard, in parallel to EMIR Title IV requirements on organisation, conduct of business 
and  prudential  requirements,  MiFIR  allows  CCPs  to  deny  access  if  after  making  all 
reasonable efforts to manage its risks, the CCP concludes that there are significant undue risks 
that cannot be managed20. 

Taking  into  account  the  above  considerations,  the  Commission  considers  that  the  open  and 
non-discriminatory access provisions to CCP for ETDs under MiFIR is likely to have overall 
positive impact on the market. And where potential risks arising from such provisions cannot 
be  ignored,  the  Commission  considers  that  MiFIR  and  EMIR  already  establish  strong 
safeguards to mitigate undue operational risks to CCPs or increased systemic risk. 

5.2 Risk from open and non-discriminatory access at trading venue level 

Open and non-discriminatory access to trading venues enables CCPs to clear trades concluded 
on  the  trading  venues  of  their  choice.  Beyond  the  promotion  of  a  more  competitive 
environment,  this  provision  aims  at  giving  to  the  trading  members  of  a  trading  venue,  the 
possibility  to  choose  the  CCP  in  which  they  want  to  clear  their  trades,  including  when  the 
CCP and the trading venue are vertically integrated in the same group.  

18 ESRB response to ESMA on the temporary exclusion of exchange-traded derivatives from Articles 35 and 36 
of MiFIR, 9 February 2016; p.4. 
19 Articles 35(6)(a) of MiFIR. 
20 Section 1, Articles 1 to 4, Commission delegated regulation of 24 June 2016 supplementing Regulation (EU) 
No  600/2014  of  the  European  Parliament  and  of  the  Council  with  regard  to  regulatory  technical  standards  on 
clearing access in respect of trading venues and central counterparties. 

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This  can  be  particularly  beneficial  for  market  participants  that  wish  to  maximise  netting 
efficiency  and  reduce  collateral  requirements  across  their  positions  on  different  trading 
venues.  

In  addition,  from  a  financial  stability  perspective,  the  Commission  shares  ESMA's  and 
ESRB's  views  that  a  multiple  CCP  environment  contributes  to  reducing  systemic  risk  by 
strengthening their substitutability in case of failure. If one CCP connected to a trading venue 
is  in  distress,  the  other  CCPs  connected  to  that  trading  venue  would  be  able  to  continue 
clearing its trades. 

Risks in relation to interoperability arrangements 

Article 2 of EMIR defines an interoperability arrangement as an arrangement between two or 
more CCPS that involves a cross-system execution of transaction. Such arrangements aim at  
to ensure that two or more CCPs can face exposures to each other as a result of the process 
whereby they net the trades of their participants across the linked CCPs.  

In  the  absence  of  an  interoperability  arrangement,  members  holding  positions  on  different 
CCPs would suffer netting inefficiencies, higher collateral needs and liquidity fragmentation. 
That  would  reduce  the  market  participant  interest  in  a  multiple  CCP  environment.  From  a 
systemic  risk  perspective,  ESMA  reports  underlines  that such  a  scenario  would  furthermore 
adversely reinforce procyclicality. 

While most of the risks described above would disappear if the different CCPs connected to a 
trading  venue  were  using  interoperability  arrangements,  the  Commission  takes  note  of  the 
ESRB's  major  concern  on  the  risk  associated  with  the  potential  multiplication  of  such 
interoperability arrangements with the implementation of open and non-discriminatory access 
to  ETDs.  Indeed,  interoperability  arrangements  under  EMIR  are  only  applicable  to 
transferable securities and money market instruments. ESMA and ESRB further caution that 
their use in the context of ETDs might introduce a substantial degree of complexity and risk 
inherent  to  the  characteristics  of  derivatives  and  might  have  adversely  consequences  on  the 
overall operation risk management at CCP level.  

The Commission;  however,  considers that MiFIR introduces safeguards to  ensure that these 
risks  are  appropriately  mitigated.  First,  according  to  Article  36(4)(a),  the  competent 
authorities shall deny access to the CCP where the access would require such interoperability 
arrangement.  An  interoperability  arrangement  could  thus  only  be  established  between  the 
different CCPs of the trading and the trading venue, have consented to it. Second, should the 
interoperability  arrangement  threaten  the  smooth  and  orderly  functioning  of  the  market,  the 
competent authorities shall still deny access to the trading venue.   

Operational risk 

Operational risks arising from the complexity of anticipated volume of transactions, as well as 
other factors creating significant undue risks, are also envisaged in MiFIR.  

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In such a case, under Articles 36(6) of MiFIR and according to the provisions detailed in the 
regulatory  technical  standards  on  clearing  access  in  respect  of  trading  venues  and  central 
counterparties21, the trading venue may deny access.  

6. 

CONCLUSIONS  

The  Commission  notes  that  EMIR  open  and  non-discriminatory  access  provisions  already 
apply  to  OTC  derivatives,  transferable  securities  and  money  market  instruments  without 
temporary  exemptions.  Following  ESMA's  assessment,  it  appears  that  these  access 
arrangements have not caused any noticeable systemic risk. It is noteworthy in this regard that 
OTC  derivatives  are  generally  less  standardised  and  more  complex  than  ETDs.  In 
consequence,  it  can  be  expected  that  the  implementation  of  MiFIR  open  and  non-
discriminatory  access  provisions  to  ETDs  may  not  raise  more  complexity  than  for  OTC 
derivatives. 

The  implementation  of  open  and  non-discriminatory  access  to  ETDs  under  MiFIR  might 
nevertheless raise risks that could potentially threaten the smooth and orderly functioning of 
markets  or  adversely  affect  systemic  risk.  More  specifically,  this  report  outlines  a  number 
potential risks and in particular risks in relation to (i) the concentration of the trading and the 
clearing  activity  in  vertically  integrated  groups,  and  to  (ii)  the  potential  multiplication  of 
interoperability  arrangements  that  would  substantially  raise  the  level  of  complexity  in  the 
overall risk management of interoperable CCPs. 

Having  examined  these  risks,  the  Commission  considers  that  the  current  regulatory 
framework  in  MiFIR  and  EMIR  appropriately  addresses  the  potential  risks  identified.  In 
addition to their regulation by relevant competent authorities, EMIR establishes organisational 
conduct  of  business,  prudential  standards  and  macroprudential  rules  for  CCPs.  In  parallel 
MiFIR gives the possibility for CCPs, trading venues and relevant authorities to deny access 
to  the  relevant  infrastructure,  as  detailed  in  the  regulatory  technical  standard  on  clearing 
access  in  respect  of  trading  venues  and  central  counterparties,  should  the  CCP,  the  trading 
venue or the market be potentially put at risk.  

On  this  basis,  the  Commission  concludes  that  it  is  not  necessary  to  temporary  exclude 
exchange-traded derivatives from the scope of Articles 35 and 36 of MiFIR.  

21 Section 2, Articles 5 to 8, Commission delegated regulation of 24 June 2016 supplementing Regulation (EU) 
No  600/2014  of  the  European  Parliament  and  of  the  Council  with  regard  to  regulatory  technical  standards  on 
clearing access in respect of trading venues and central counterparties. 

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