Key takeaways – Derivatives Trading Obligation
• On 15 June 2026, the European Commission published the implementing acts granting official Derivatives Trading Obligation (DTO) suspensions for several EU market markers when transacting in-scope instruments on UK trading venues with non-EU clients under certain conditions.
• These suspensions are putting an end to a long-standing Brexit challenge, as explained in our previous article, to ultimately ensure that market participants are benefiting from better liquidity and improved competition.
• While it was a long journey to obtain these suspensions, this is a positive step in a broader context where the Union is looking for solutions for simplification, competitiveness and less fragmentation on the global stage for EU firms.
What you need to know about the Derivatives Trading Obligation
MiFIR (Markets in Financial Instruments Regulation)
Following the global financial crisis in 2008, one flagship measure from global reforms in the EU was the introduction of a Derivatives Trading Obligation (DTO) for most liquid derivatives, in force since January 2018.
The DTO consists of a requirement to execute in-scope trades on either an EU trading venue (TV) or a third country TV that has been assessed as equivalent by the European Commission (EC).
Brexit
From an EU perspective, UK trading venues have been considered third country since the end of the transition period, on 31 December 2020. These have not been recognised as equivalent by the EC, to comply with the EU DTO. Without a decision on equivalence, EU investment firms are still unable to transact DTO instruments on UK TVs.
MiFIR review brought an intricate solution…
Back in November 2021, the European Commission unveiled its proposal to introduce targeted adjustments to the current MiFIR regime. One long-awaited measure was a Derivatives Trading Obligation stand-alone suspension mechanism, to allow EU banks to once again trade most liquid derivatives on UK trading venues, with clients from outside the EU under certain conditions, the main one being such clients must not have access to an EU trading venue. This measure, or in other words the possibility to request this suspension, came into force in 2024, when the MiFIR reform was published in the EU Official Journal.
… but still a long way to go
While the possibility for market makers to request a Derivatives Trading Obligation suspension was set into Union law, the process to officially obtain these suspensions was a longer than expected legislative journey. It required several steps and close collaboration between EU authorities and the industry to gather all underlying information to build the case. Finally, on 15 June 2026, the European Commission published the implementing acts granting officially a DTO suspension for several EU market makers.
Now, back on UK trading venues to better assist our clients
As the legislative process has now crossed the finish line, market makers in the EU are welcoming the possibility to leverage the new environment to better serve clients. Following the implementation of this DTO suspension, institutional investors and corporates based outside of the EU will now face a less fragmented landscape for liquidity, being able to again access liquidity from EU banks on UK trading venues when transacting DTO instruments, for the first time since Brexit. At the same time, EU banks will continue to support the building of a strong EU market infrastructure when servicing their EEA client base.
BNP Paribas Global Markets welcomes the official granting of the DTO stand-alone suspension mechanism that will facilitate for EU banks trading on UK trading venues with our non-EU clients. Market participants will benefit from increased liquidity while this will finally ensure more integrated and competitive EU capital markets.
Simon Laforet, Senior Officer in Public and Regulatory Affairs at BNP Paribas Global Markets.