ESMA Consultation
FESE response to the ESMA consultation on transparency for derivatives
Market structure
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2 Jul 25
FESE supports ESMA’s objective of enhancing transparency while maintaining flexibility and proportionality across asset classes. Key points of the response include:
- Pre-Trade Transparency: FESE supports a more static and predictable liquidity assessment, highlighting concerns over significantly increased thresholds for certain equity derivatives. It advocates for reintroducing ADNA ranges or a floor-based approach to ensure proportionality.
- Post-Trade Transparency: FESE welcomes efforts to align deferral regimes with market practices and supports a maximum deferral period of T+2. However, it warns against the negative impact of removing ADNA granularity on equity derivatives.
- Liquidity Assessments:
- For equity ETDs, FESE supports Option C, provided that ADNA-based granularity is reintroduced in a simplified form.
- For interest rate ETDs, Option B is preferred due to its flexibility.
- FESE supports ESMA’s approach for commodity, FX, credit, and other derivatives, while stressing the need for adaptive methodologies, especially for fast-evolving markets like energy.