March Global Regulatory Brief: Trading and markets

Bloomberg Professional Services

March 26, 2025

The Global Regulatory Brief provides monthly insights on the latest risk and regulatory developments. This brief was written by Bloomberg’s Regulatory Affairs Specialists.

Trading and markets regulatory developments

Regulatory authorities continue to advance initiatives to improve the efficiency and sophistication of global market structure. The following market structure policy developments represent a sample of wider regulatory and policy coverage available to Bloomberg Terminal customers. Run REGS <GO> to find out more or contact your Bloomberg representative to learn more:

UK: Government moves ahead on accelerated settlement to T+1
India: SEBI consults on equity derivatives
USA: SEC extends compliance dates for Treasury central clearing
EU: Commission consults on commodity derivatives markets

Explore the latest regulatory insights with our outlooks, webinars, research and analysis.

UK Government moves ahead on Accelerated Settlement

The UK Government has responded to a report from the Accelerated Settlement Technical Group and confirms its intention to bring forward secondary legislation to change the current T+2 requirement under the UK Central Securities Depositories Regulation (CSDR) to a T+1 requirement.

What does T+1 mean? A T+1 standard would mean that in a typical securities trade, such as buying and selling shares, the buyer would receive the securities they have purchased, and the seller would receive payment, the day after the trade is agreed. This is faster than the current two-day standard and could bring benefits such as cost savings for investors, alignment with international markets, and driving increased efficiency in ‘back office’ processes.

In more detail: The report recommends 12 ‘critical’ and 26 ‘highly recommended’ actions to facilitate a successful transition to T+1. Many of these recommendations are for market participants and will be implemented through a new ‘T+1 code of conduct’.

Timing: The Government accepts the recommendation that T+1 should come into effect in the UK on Monday 11 October 2027 in line with other European jurisdictions. On this basis, firms should now begin preparations for 11 October 2027 to be the first day of trading under a T+1 standard.

Looking ahead: The government will introduce the relevant legislation when Parliamentary time allows.

The Accelerated Settlement Taskforce will oversee implementation of the recommendations until the transition to T+1 has been delivered and for a short period afterwards to assess the short-term impacts.
Andrew Douglas will continue to chair this next stage of the Taskforce and relevant industry chairs from the EU and Switzerland will be invited to attend meetings as observers.

SEBI consults on enhancing trading convenience and strengthening risk monitoring in equity derivatives

The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing measures to refine open interest (OI) calculations, revise position limits, and align derivatives trading mechanisms with the cash market. The changes aim to improve market efficiency, enhance risk monitoring, and reduce systemic vulnerabilities.

In more detail: The changes proposed in the paper include:

Transition to delta-based OI calculation: Moving from a notional OI approach to a future equivalent (FutEq) methodology to address the limitations of the former approach, particularly its lack of meaningful aggregation across futures and options and potential for manipulation. The future equivalent approach reflects actual market exposure by incorporating delta-adjusted values for options.
Revised market-wide position limits (MWPL): Revising existing MWPL methodology in line with the proposed transition to a Delta-based OI calculation approach, as FutEq OI is generally lower than notional OI. The limit will be set at the lower of 15% of free-float market capitalization or 60 times the average daily delivery value in the cash market compared to existing MWPL of 20% for each single stock.
Position creation during ban period: Permitting traders to initiate new positions post a scrips exceeds the MWPL and enters ban period, only if they reduce their starting FutEq OI for the day. This measure aims to manage both individual and systemic risk.
Pre-open and post-closing sessions for derivatives trading: Extending pre-open and post-closing sessions to futures on both single stocks and indices, mirroring the modalities of the cash market. This is intended to improve price discovery and reducing volatility.
Eligibility criteria for non-benchmark index derivatives: Introducing eligibility criteria for sectoral and thematic indices to qualify for derivatives trading, aligning them with benchmark indices which are generally broad-based. The criteria would include a minimum of 14 constituents, limits on concentration, etc., to reduce price manipulation risks.
Revised Entity-Level Position Limits for Single Stocks: Adjusting existing limits in accordance with a transition to a Delta-based OI calculation approach to ensure that large positions do not create market concentration risks. The revised limits will be based on MWPL or a percentage of total FutEq OI across exchanges, whichever is lower.

Next steps: SEBI has invited public comments on the consultation paper, with stakeholders encouraged to submit their feedback by March 17, 2025.

US SEC extends compliance dates for Treasury central clearing

The US Seucurities and Exchange Commission (SEC) announced a one-year extension of the compliance deadline for central clearing of eligible Treasury secondary market transactions. In addition to the delay, the SEC also issued exemptive relief related to the margin segregation rule.

This decision was widely anticipated after major industry groups submitted a joint letter in late January advocating for a delay. In the letter, the groups highlighted key outstanding issues and cautioned that, without a delay, there could be disruptions to the Treasury cash and repo markets.

Timing: The SEC extended the compliance dates by one year, from December 31, 2025, to December 31, 2026, for eligible cash market transactions, and from June 30, 2026, to June 30, 2027, for eligible repo transactions.

Exemptive Order: Along with the deadline extension, the SEC issued an Order Granting Temporary Exemptive Relief to the margin separation requirement. The SEC is providing this temporary relief until September 30,2025 (six-month extension) to ensure that direct participants who are currently clearing for indirect participants are ready to make the legal, operational, and risk management changes to meet that requirement.

In more detail: The extension will give the SEC additional time to assess new clearing applications and proposed rule changes, as well as provide the market with the necessary time to amend contractual agreements. Additionally, the delay also supports further development of done-away clearing, standard documentation, onboarding processes, and system upgrades. Overall, the additional time should facilitate orderly implementation that will help avoid potential disruptions in cash and repo markets.

Looking ahead: While the one-year extension addresses the central point of the joint letter from industry groups, several significant issues are still unresolved. These include mixed CUSIP triparty transactions, the use of the inter-affiliate exemption, the extraterritorial scope, new clearing entrants and cross-margining, documentation, and impact of bank capital requirements.

EU consults on commodity derivatives markets

The European Commission launched a consultation on the future of commodity derivatives markets in the EU, seeking views on a wide array of issues ranging from the regulatory perimeter and circuit breakers to transparency, position limits, derivatives CTP, and price caps.

Context: MiFID3 mandates the Commission to assess commodity derivatives markets, including EUAs or derivatives on EUAs. That was motivated by the recent energy crisis and the extreme volatility in energy markets.

The report by Mario Draghi on The future of European competitiveness includes a significant number of recommendations linked to the functioning of energy spot and derivatives markets to lower energy prices.
The outcome of this consultation will therefore inform two main deliverables
MiFID3 report on commodity derivatives markets
Commission broader potential reforms of the wholesale energy and related financial markets, including amendments to MiFIR/D and REMIT
The consultation was published together with the Affordable Energy Action Plan, which sets out the Commission’s overarching strategy to tackle high energy costs.

In summary: The consultation covers mainly 5 areas:

Data aspects related to commodity derivatives – including further harmonisation and a centralised data collection mechanism for MiFIR/MiFID/EMIR/REMIT reporting, amendments to price transparency for commodity derivatives under MiFIR/D, and the inclusion of exchange-traded commodity derivatives in the Consolidated Tape.
Ancillary activity exemption – including the scope of the exemption, the de minimis test threshold, and the potential implications of the expansion of the MiFID regulatory perimeter on the IFR/D framework.
Position management and position reporting – options include extending position reporting requirements beyond MiFID investment firms, and enhanced access to information on positions across financial and wholesale market supervisors.
The appropriateness of the existing MiFID position limits regime – including exploring the Draghi idea to set different position limits according to the type of trader, the suitability of the hedging exemption from the position limits regime, and considering a greater role for trading venues in setting position limits. The consultation also explores whether a similar position limits regime should be applied in the context of REMIT.
Circuit breakers – including assessing the effectiveness of the IVMs adopted in response to the 2022 energy crisis, a requirement for trading venues to implement a permanent static circuit breakers, the application of circuit breakers to spot energy products/non-MiFID financial instruments, and the potential impacts of such measures in driving trading towards OTC markets.
Draghi report suggestions – questions on an EU trading obligation for commodity derivatives, the effectiveness of price caps, and the application of certain MiFID organisational requirements for market participants and trading venues to the spot market.

Looking ahead: The deadline for responses is 9 April 2025.

View the additional regulatory briefs from this month:

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