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ESMA sheds light on OTC trade reporting under No-Deal

ESMA has released a statement which amongst other things includes clarification for EU investment firms that they will have to publish their OTC trades via an EU APA if a UK counterparty is involved. Whilst in Europe this approach may serve to ensure post-trade transparency within the EU27, it is also true that the UK counterparty could be required to publish that trade to a UK APA. This sounds to me like a recipe for a return to the problem of OTC duplicate reporting, despite MiFID II’s decade in the making efforts to improve on that situation.

In case of a no-deal Brexit UK firms will become third country counterparties when facing the EU, and with no equivalence granted pan-European participants may end up shedding a bit too much light on OTC volumes.

 

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