The UK’s Financial Services Authority (FCA) has approved over the weekend Bloomberg’s application to register as a European multilateral trading facility (MTF) in compliance with the upcoming MiFID II and EMIR guidelines, according to a reports in the British financial press.
Expected to come into effect in just two years, the new European rules require institutional trading venues to provide more pricing transparency on their telephone-based and electronic execution. The Markets in Financial Instruments Directive (MiFID) is meant to achieve harmonised regulation for investment services across all the 31 member states of the European economic area as well as increase competition and consumer protection.
This move is a markable success for Bloomberg’s global strategy, leveraging its similar experience in the U.S market. Until now, Bloomberg’s regulatory status in Europe was deficient compared with rival interdealer brokers like ICAP and Tullett Prebon.
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In the American market, Bloomberg SEF LLC, executed more than $6.6 trillion in transactions during just its first year of operation. Since the CFTC’s swap execution facility rules went into effect on October 2, 2013, and up to October 2, 2014, nearly 150,000 trades were completed on Bloomberg SEF LLC across its multiple asset classes.
Credit default swaps (CDS) and interest rate swaps (IRS) comprised the vast majority of Bloomberg SEF LLC transactions. Approximately 85,000 CDS transactions totaling $3.45 trillion and 48,000 IRS transactions totaling $3.15 trillion were executed on Bloomberg SEF LLC in its first year of operations. More than 11,000 FX derivatives trades were completed for a total of $59.78 billion. Commodities derivatives were the least traded instruments with 518 trades totaling nearly $2 billion.