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Version date: 21 December 2020 - onwards
Version 2 of 2

OTC Question 1: Definition of OTC Derivatives [last update 21 December 2020]

Definition of OTC derivatives

The definition of OTC derivatives is provided for in EMIR Article 2 and is relevant for a number of provisions in EMIR, including the positions of OTC derivatives that an NFC shall calculate for the purpose of determining whether it has reached a clearing threshold (Article 10), and the OTC derivative classes that NCAs shall notify to ESMA (Article 5). Should the following be considered OTC derivatives?

(a) derivative contracts traded on MTFs or OTFs;

(b) derivative contracts which are not executed on a regulated market, but which share the same characteristics as exchange traded derivatives, so that once cleared they become fungible with ETD;

(c) derivative contracts executed on third-country markets;

(d) derivatives contracts executed outside a regulated market, but processed by an exchange and cleared by a CCP;

(e) What is the status under EMIR of derivative contracts that were executed in a regulated market in the United Kingdom (UK), if this market becomes a third country market not considered to be equivalent to a regulated market?

OTC Answer 1