The European Securities and Markets Authority (ESMA) has issued a consultation paper on draft guidelines on central counterparty (CCP) conflicts of interest management.
The European Markets Infrastructure Regulation (EMIR) only prescribes generic provisions in relation to the management by CCPs of conflicts of interest. Building on ESMA’s experience in CCP colleges, it appears to the European Supervisory Authority that further guidance on CCPs management of conflicts of interest would be beneficial and further facilitate supervisory convergence in this area.
The draft guidelines firstly define what constitute a conflict of interest and what should be the scope of the CCP policy regarding conflicts of interest. Secondly, the draft guidelines describe the organisational arrangements the CCP should take in order to avoid or mitigate conflicts of interests including the specific situation where the CCP is part of a group. Finally, the draft guidelines envisage the procedure the CCP should implement to solve conflicts of interest.
The deadline for comments on the consultation paper is 24 August 2017.
Once the draft guidelines have been adopted they will apply to competent authorities supervising CCPs under Article 16 of EMIR and to CCPs authorised under Article 14 of EMIR.
View ESMA consults on measures for CCPs to manage conflicts of interest, 1 June 2017