PS25/2: Policy Statement on the derivatives trading obligation and post-trade risk reduction services

Read PS25/2 (PDF)[1]

This policy statement (PS) provides a summary of the feedback received to our consultation[2] (CP24/14) and how we responded to the feedback. This PS outlines the final rules regarding the classes of SOFR OIS (secured overnight financing rate overnight index swaps) subject to the Derivatives Trading Obligation (DTO). It also includes the final rules framework to provide exemptions from the DTO, and other relevant obligations, for transactions arising from the use of post-trade risk reduction services.

August 2025 update: We have amended the technical standards instrument in Appendix 1 of the PS due to a typographical error. You can access the amended instrument[3] in our Handbook. The DTO Register[4] was updated on 30 June 2025 and accurately reflects the instruments in scope of our DTO. 

Who this applies to

This Policy Statement and final rules will primarily be of interest to:

• Providers of post-trade risk reduction services (PTRRS).
• Trading venues which admit to trading or trade derivatives.
• Investment firms and banks dealing in derivatives.

Our rules will also interest Approved Publication Arrangements (APAs), central counterparties (CCPs), law firms, consultancies and their related trade associations.

The rules will be live from 30 June 2025.

Next steps

Providers of eligible risk reduction services must notify us with the details required in MAR 12.6 (See Appendix 2) prior to providing the service for the first time. Further information, including how to notify, can be found in Chapter 3.  

Background

In July 2024, as part of the Wholesale Markets Review (WMR), we published CP:24/14 [2]outlining proposed changes to the scope of the DTO[4] and the framework for exemptions from the DTO, and other relevant obligations, for Post-Trade Risk Reduction Services (PTRRS). 

Our consultation proposed the following: 

• Amend the scope of the DTO by including specified classes of OIS based on SOFR.
• Establish a new framework to allow transactions executed through PTRRS to benefit from certain exemptions, including the DTO.
• Use our power of direction to modify the DTO.

Respondents supported our proposals across all three areas. 

There was unanimous agreement on the use of our power of direction to modify the DTO, which replaced the previous direction under the Temporary Transitional Powers (TTP). Following this, we published[5] the new direction in November 2024. It came into effect directly upon expiry of the TTP direction on 31 December 2024.