EU derivatives market worth €453 trillion, ESMA says
20 October, 2017
The European Union's derivatives market is worth a notional €453tn, and there are around 33m transactions still open, the Paris-based European Securities and Markets Authority (ESMA) said in its first overview of it. The study was based on data available as of February 24 from trade repositories. Under EU rules counterparties and clearing houses must report details of any derivative contracts that have been concluded, modified or terminated.
ESMA's research covered interest rate, credit, equity, commodity and foreign exchange derivatives.
This "is but a starting point," ESMA said. There is "substantial work yet to be carried out on enhancing data quality and on further market and statistical analysis."
The study showed equity derivatives accounted for 48% of all transactions while, measured by value, interest rates made up the largest market at €282tn, ESMA said. The work is based on the combined data received from all six trade repositories in the EU, who are supervised by ESMA, under the reporting requirements of the European Markets Infrastructure Regulation (EMIR). The data provided by trade repositories is an extensive source of information about derivatives, including bank and non-bank entities.
EU regulators are set to conduct a large-scale study into the cost and performance of both active and passive funds, ESMA chair Steven Maijoor said in a Paris conference speech on 17 October. Maijoor said that ESMA and the European Banking Authority would assess retail products' cost reporting and past performance to "increase investors' awareness of the net return of these products, and the impact of fees and charges." He added that regulators would obtain more data to complete their assessment when MiFID II comes into force in January.