European regulation of derivatives—one minute guide
European regulation of derivatives—one minute guide

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • European regulation of derivatives—one minute guide
  • OTC derivatives and ETDs
  • Why are derivatives regulated?
  • Who regulates derivatives in the EU?
  • Key current regulations affecting derivatives
  • Key current regulatory proposals affecting derivatives in the EU

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—Key issues for derivatives transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.

OTC derivatives and ETDs

There are two broad types of derivatives:

  1. over the counter (OTC) derivatives, and

  2. exchange traded derivatives (ETDs)

OTC derivatives may be sub-divided into:

  1. non-cleared OTC derivatives, and

  2. cleared OTC derivatives, which have features in common with both non-cleared OTC derivatives and ETDs

For more information on OTC derivatives and ETDs, see Practice Notes: OTC and exchange traded derivatives—key features and concepts and