On Monday 30 September, AIMA submitted a response to the UK Financial Conduct Authority’s (FCA) consultation paper on the derivatives trading obligation (DTO) and post-trade risk reduction services. The consultation paper was published as part of HM Treasury’s Wholesale Markets Review
 

AIMA’s response:

• Supports proposals to include certain overnight index swaps (OIS) based on the US Secured Overnight Financing Rate (SOFR) within the classes of derivatives subject to the DTO;

• Supports proposals to expand the list of post-trade risk reduction services exempted from the DTO and from other obligations; and

• Agrees with how the FCA intends to use its power to suspend or modify the DTO once its temporary transitional powers under Part 7 of the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 expire at the end of 2024.

The FCA will publish a policy statement with final rules in Q4 2024.

If you have any questions on the consultation paper, please contact Aniqah Rao.