ISDA has published a note explaining how MiFID 2 and MiFIR will mandate on-exchange trading for clearing-eligible and sufficiently-liquid OTC derivatives. Systematic internalisation (SI) rules will apply where a firm trades liquid OTC instruments. The focus should therefore be on defining the scope of these requirements, ensuring that only appropriately liquid instruments are covered by the regime, rather than making them depend on a re-engineered definition of OTC activity. (Source: Understanding the Role of the MiFID2/MiFIR OTC Category)