Recital 8

(8)Currently, derivatives fall within the scope of the non-equity transparency regime, which combines different types of financial instruments with mostly securities (bonds) on the one hand and mostly contracts (derivatives) on the other. Transparency for non-equity instruments, as well as for equity instruments, relies on the concept of ‘traded on a trading venue’. For certain derivatives, that concept has proven to be problematic due to their lack of fungibility and the lack of appropriate identifying reference data. For that reason, the scope of derivatives transparency should rely not on the concept of ‘traded on a trading venue’, but, rather, on predefined characteristics of the derivatives. The derivatives should be subject to the transparency requirements regardless of whether they are traded on or off venue. The transparency requirements should apply to derivatives that are sufficiently standardised for the data published in relation to them to be meaningful for market participants beyond the contracting parties. This means that all exchange-traded derivatives should remain subject to the transparency requirements. Other derivatives should be subject to the transparency requirements where they fall within the scope of the clearing obligation under Regulation (EU) No 648/2012 of the European Parliament and of the Council ⁷ (‘clearing obligation’), for which a degree of standardisation is a prerequisite, and are centrally cleared. This ensures that transactions that are considered to be unsuitable for the clearing obligation, such as intragroup transactions, are not subject to the transparency requirements. In particular, only interest rate derivatives with the most standardised and liquid currency and tenor combinations should fall within the scope of the transparency requirements. Furthermore, recent market events have shown that a lack of transparency in certain credit default swaps referencing global systemically important banks or referencing an index comprising such banks might fuel speculation on the creditworthiness of such banks. Such credit default swaps should therefore also be subject to the transparency requirements where they are centrally cleared even where they are not subject to the clearing obligation. The Commission should be empowered to amend the conditions for determining the derivatives that are to be subject to the transparency requirements where market developments so require.