This regulation mandates that all OTC derivative contracts pertaining to specified classes must be cleared by recognised counterparties if they meet certain conditions, such as being concluded between relevant financial and non-financial entities. Contracts that fall under intragroup transactions are exempted, provided appropriate notifications are made to the FCA.

Additionally, cleared transactions must occur through an authorised Central Counterparty (CCP), with provisions ensuring that services are offered under fair and transparent terms. The FCA retains the authority to establish technical standards to ensure compliance and mitigate regulatory arbitrage in this domain.