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14 August 2015

ICMA AMIC responds to European Commission consultation on central clearing of OTC derivatives


AMIC members have only expressed interest in certain aspects of the review: the functioning of the clearing obligation in the areas of frontloading and risk compression; trade reporting; and the functioning of the pension scheme arrangement (PSA) transitional exemption from the clearing obligation.

The AMIC composition embraces the diversification and the current dynamics of the industry – representing the full array of buy side interests both by type and geography. The AMIC’s focus is on issues which are of concern to its broad membership, rather than having a specific product focus.

On the clearing obligation, the EMIR review is useful opportunity to re-examine the effectiveness of the frontloading regime and the value of risk compression trades. The AMIC believes the frontloading requirement should be removed for all future classes of derivatives deemed subject to the clearing obligation and the treatment of trades that result from systemically risk-reducing processes should be exempted from the clearing mandate and rules governing the margining non-cleared derivatives.

With regard to trade reporting, the European Commission should consider moving to single-side reporting to improve the accuracy of data provided to regulators to allow improved monitoring of systemic risk.

On the pension scheme arrangement transitional exemption, AMIC members are convinced the exemption would benefit from an extension until a robust solution is found to allow non-cash variation margin to be used by pension scheme arrangements, or at least to restart the exemption to coincide with the start of the clearing obligation.

Full response



© ICMA


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