The European Commission has published consultation for a draft Delegated Regulation supplementing the Markets in Financial Instruments Regulation as regards OTC derivatives identifying reference data to be used for the purposes of the transparency requirements laid down in Article 8a(2) and Articles 10 and 21 of MiFIR. Following the MiFIR Review, MiFIR now clarifies that the pre- and post-transparency requirements for non-equity instruments applies to both exchange-traded and OTC derivatives. The post-trade disclosure obligation for investment firms was also amended and that obligation no longer applies to derivatives "traded on a trading venue," but it does apply to OTC derivatives traded by an investment firm either on its own account or on behalf of clients. The transaction reporting obligation applies to both types of derivatives.

The draft Delegated Regulation sets out the identifying reference data to be used for OTC interest rate swaps and OTC credit default swaps for the transparency requirements. It also provides the full set of relevant identifying reference data that needs to be assigned to a given ISO 6166 ISIN for OTC interest rate swaps and OTC credit default swaps. In addition, the draft Delegated Regulation defers the date of application to September 1, 2025. The deferral is intended to allow enough time for the revision of the ISIN template and the implementation of the necessary adjustments to IT systems, while taking into consideration the timeline prescribed by the MiFIR review for the launch of the OTC derivatives consolidate tape tender process.

The Commission consulted on the appropriate identifying reference data to be used for the transparency reporting of OTC derivatives within the scope of Article 8a(2) MiFIR in November. After reviewing the responses received, the Commission explained that the Delegated Regulation seeks to strike a balance between allowing for the use of the same identifier for transparency and transaction reporting purposes, ensuring continuity of use for identifying reference data for the purposes of transaction reporting. The deadline for comments is July 10, 2024. Subject to no objections from the Council of the European Union or European Parliament, the draft Delegated Regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union and apply from September 1, 2025.

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