Revocation of retained EU law Transitional amendments Amendments to the Markets in Financial Instruments Regulation (MiFIR) and the European Market Infrastructure Regulation (EMIR) Fixed income and derivatives markets Exemptions for post-trade risk reduction services
Article 31 MiFIR concerns a post-trade service used in derivatives markets known as ‘portfolio compression’, which MiFIR defines as a risk reduction service in which two or more counterparties wholly or partially terminate some or all of the derivatives submitted by those counterparties for inclusion in the portfolio compression and replace the terminated derivatives with another derivative whose combined notional value is less than the combined notional value of the terminated derivatives. Article 31(1) MiFIR exempts those carrying out portfolio compression from certain requirements, and in particular it exempts the trades that occur as part of portfolio compression from the DTO.
	The Act makes the exemption from the DTO available to other post-trade risk-reduction services which can perform a similar function by empowering the FCA to set the appropriate scope of the exemption, which would no longer be linked to portfolio compression, and the appropriate conditions that should attach to its use.