UK FCA extends UK DTO direction under UK MiFIR

The UK Financial Conduct Authority (FCA) has issued a new direction with an explanatory statement (published later, on 2 January) under Article 28a(9) of the UK Markets in Financial Instruments Regulation (MiFIR) regarding its direction on the derivatives trading obligation (DTO). The direction, originally issued on 31 December 2024, permits firms which would otherwise be subject to the UK DTO trading with EU DTO clients to execute trades on EU venues provided certain conditions are met. The statement confirms that the direction is extended for a further six months, remaining effective until 30 June. The FCA states that this decision satisfies the conditions under Article 28(1)(a) of MiFIR, reflecting the ongoing need to prevent or mitigate market disruption caused by the absence of mutual equivalence between the UK and EU. It also satisfies Article 28a(1)(b) as the measure advances the FCA's operational objectives under the Financial Services and Markets Act 2023. A further review will take place at the end of the next six-month period, after which, if the direction is still in force, the FCA will issue a new statement.

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