25 June 2012

ESMA proposes rules on derivatives, central counterparties and trade repositories

EMIR aims to achieve the mentioned goals by reducing risks via the use of central clearing and risk mitigation techniques, increasing transparency via trade repositories (TR) and ensuring sound and resilient central counterparties (CCPs).

This consultation paper includes the Regulatory and Implementing Technical Standards ESMA is required to draft under the Regulation of the European Parliament and Council on OTC derivatives, central counterparties and trade repositories (EMIR). It covers implementing measures for the application of the clearing obligation for risk mitigation techniques, exemptions for non-financial counterparties and intra-group transactions, requirements for CCPs and reporting and disclosure obligations for trade repositories.

This consultation paper seeks stakeholders’ views on Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) ESMA is required to draft under the Regulation of the  European Parliament and Council on OTC derivatives, central counterparties and trade repositories. Under Articles 10 and 15 of Regulation (EU) No 1095/2010 of the European Parliament and Council establishing ESMA, ESMA needs to conduct a public consultation before submitting draft RTS or ITS to the Commission.

The input from stakeholders will help ESMA in finalising the relevant draft technical standards. As highlighted in the ESMA discussion paper on these draft technical standards, one essential element in the development of draft technical standards is the analysis of the costs and benefits that these legal provisions will imply. The limited information available and collected in the course of the consultation on the discussion paper did not allow ESMA to produce for the purpose of this consultation paper a quantitative impact study. Respondents to this consultation are encouraged to provide the relevant data to support their arguments or proposals.

Contents

This consultation paper follows the structure of EMIR, with the first section focusing on OTC derivatives and in particular the clearing obligation, risk mitigation techniques for contracts not cleared by a CCP, and exemptions to certain requirements. The second part focuses on CCP requirements, where a number of provisions need to be specified through technical standards. The third part deals with trade repositories and in particular the content and format of the information to be reported to trade repositories, the content of the application for registration to ESMA, and the information to be made available to the relevant authorities. For each section, a reference is made to the relevant Article in EMIR and to the relevant Annex in this consultation paper where the draft technical standards are included.

Next steps

ESMA is organising a second public hearing on 12 July 2012, to give an opportunity to interested stakeholders to express their preliminary views and to get early feedback. On the basis of the responses to this consultation paper, ESMA will update the draft technical standards and the impact assessment and send the final report to the European Commission for endorsement.

Full consultation paper

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