Recital 1

(1)It results from the definition of ‘OTC derivative’ and ‘OTC derivative contract’ laid down in Article 2, point (7), of Regulation (EU) No 648/2012 that financial instruments other than OTC derivatives are derivative contracts the execution of which takes place either on a regulated market as defined in Article 4(1), point (21), of Directive 2014/65/EU of the European Parliament and of the Council ² , or on a third country market considered equivalent to a regulated market pursuant to Article 2a of Regulation (EU) No 648/2012. In consequence, for the purposes of Regulation (EU) No 648/2012, derivative contracts executed on a third country market deemed equivalent to a regulated market should be classified as financial instruments other than OTC derivatives.