06 March 2012

European Supervisory Authorities published a joint Discussion Paper on Draft Regulatory Technical Standards foreseen by EMIR

The European Market Infrastructure Regulation (EMIR - “the Regulation”) on OTC derivatives, CCPs and trade repositories introduces provisions to improve transparency and reduce the risks associated with the OTC derivatives market, and establishes common rules for central counterparties (CCPs) and for trade repositories (TRs). The Regulation acknowledges that not all OTC derivatives would meet the necessary requirements to be centrally cleared. For this reason, it introduces provisions on risk mitigation techniques for OTC derivatives not cleared by a CCP.

In this respect, the Regulation delegates powers to the European Commission to adopt Regulatory Technical Standards (RTS) on the level of capital and collateral counterparties to derivatives transactions need to maintain, the type of collateral and segregation arrangements, as well as on the procedures to apply an intragroup exemption.
The ESAs are required to develop jointly draft regulatory technical standards on these matters. This discussion paper analyses possible options that the ESAs are currently considering for the development of these draft technical standards.

In addition, following this discussion paper and on the basis of the relevant input received, the ESAs will prepare draft technical standards to be included in the consultation paper which will most likely be published around summer 2012.

ESMA already published a discussion paper on 16 February 2012 on the draft RTS and Implementing Technical Standards (ITS) which it is required to develop.

The EBA is also publishing today together with this joint discussion paper a discussion paper on draft RTS on capital requirements for CCPs. To facilitate an efficient processing of the information, it was agreed between the three ESAs that ESMA will be centrally collecting the answers.

The consultation will end on Monday, 2 April.

Press release

Full paper

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