Recital 1

(1)Regulation (EU) No 648/2012 lays down clearing and bilateral risk-management requirements for over-the-counter (‘OTC’) derivative contracts as well as reporting requirements for such contracts. Point (7) of Article 2 of Regulation (EU) No 648/2012 defines OTC derivatives as derivative contracts the execution of which does not take place on a regulated market within the meaning of point (14) of Article 4(1) of Directive 2004/39/EC of the European Parliament and the of the Council ² or on a third country market considered as equivalent to a regulated market in accordance with Article 2a of Regulation (EU) No 648/2012. Therefore, any derivative contract the execution of which takes place on a third-country market not deemed equivalent to regulated markets are classified as OTC for the purposes of Regulation (EU) No 648/2012.