ISD Regulatory classification ISD “Regulated market” (segment): Insert 1: ISD Regulatory classification Organised markets: matching orders of multiple buyers and sellers subject to non-discretionary rules etc. Investment firms: including transaction facilitators, automated order matching brokers/IDBs, dealer systems Authorisation by nat. competent authority: to provide specified core/non-core services Alternative (non ISD) markets (segments)” organised trading between for instruments not eligible for trading on “reg. Mkt” e.g.: non-publicly offered securities; publicly offered securities which do not meet disclosure and other req. for admission to trading on reg. Market; derivative instruments for which there is no “proper market”. ISD “Regulated market” (segment): Only following securities are eligible for admission to trading on reg. market: publicly offered securities which meet disclosure and other statutory requirements; derivatives based on them; derivatives based on rates indices, commodities for which there is “proper market” Special requirements for order-matching broker or dealing systems Reporting of off-market trades : Requirement for dealers/brokers to report or make public post-trade details of off-market transactions Approval by national competent authority; subject to compliance with any relevant national provisions; no rights or obligations under ISD Possible stepping up of user surveillance: Possibility for authority to require implementation of arrangements for monitoring/surveillance of system users. Authorised by nat. competent authority subject to: compliance with ISD principles for market operator and market Notification to Commission & CESR: right to verify whether market operator and rules of market comply with ISD requirements before incl. on list of “regulated markets”