United Kingdom

Topic: Clearing and settlement

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HM Treasury consultation on SMCR for FMIs

On 20 July 2021, HM Treasury issued a consultation document detailing a proposed Senior Managers and Certification Regime (SMCR) for financial market infrastructures (FMIs) supervised by the Bank of England (BoE). In practice, the FMIs are central counterparties, central securities depositories and payment systems recognized under the Banking Act 2009, and specified service providers to … Continue Reading

ESMA third report on CSDR implementation

On 16 July 2021, the European Securities and Markets Authority issued its latest report on the implementation of the Central Securities Depositories Regulation (CSDR). The report looks at the provision of banking-type ancillary services by central securities depositories (CSDs). The report contains suggestions to enhance the authorisation process for CSDs to provide banking-type ancillary services … Continue Reading

GFXC updates FX Global Code, publishes new templates for disclosures and guidance paper on Pre-hedging

On 15 July 2021, the Global Foreign Exchange Committee (GFXC) completed its review of the FX Global Code, updating its principles of good practice in the foreign exchange market in several key areas. The GFXC also published templates for industry participants to use in improving disclosures and assisting with transaction cost analysis. The GFXC is … Continue Reading

ESMA consults on EMIR reporting guidelines

On 13 July 2021, the European Securities and Markets Authority (ESMA) issued a consultation paper on draft guidelines for derivatives reporting under the European Market Infrastructure Regulation (EMIR). When finalised the guidelines will apply to financial and non-financial counterparties to derivatives as defined in Articles 2(8) and 2(9) of EMIR, to trade repositories as defined … Continue Reading

ESMA publishes methodology for assessing third country CCPs systemic importance

On 13 July 2021, the European Securities and Markets Authority (ESMA) published a methodology for assessing whether a third country central counterparty (TC-CCP) or some of its clearing services are of such substantial systemic importance that the TC-CCP should not be recognised to provide certain clearing services or activities in the European Union. The methodology … Continue Reading

ESMA final report – technical advice on simplification and harmonization of fees to TRs under EMIR and SFTR

On 12 July 2021, the European Securities and Markets Authority (ESMA) issued a final report setting out its technical advice to the European Commission regarding the simplification and harmonisation of its fee regulations applicable to trade repositories (TRs) under the European Market Infrastructure Regulation and the Securities Financing Transactions Regulation (SFTR). In particular in section … Continue Reading

ESMA launches public consultations on CCP recovery regime

On 12 July 2021, the European Securities and Markets Authority (ESMA) issued seven public consultation papers intended to gather feedback on how to implement its central counterparty (CCP) recovery mandates. The seven consultation papers contain, among others, proposals for draft regulatory technical standards (RTS) on the methodology for calculation and maintenance of the additional amount … Continue Reading

BoE consults on fees regime for financial market infrastructure supervision 2021/22

On 30 June 2021, the Bank of England (BoE) issued a consultation paper setting out proposals for its supervisory fees for financial market infrastructure for 2021/22. The proposals include the fee rates to meet the BoE’s 2021/22 funding requirement for its financial market infrastructure activity and the policy that supports this, as permitted by the … Continue Reading

PS14/21 – Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251

On 30 June 2021, the PRA and FCA jointly published Policy Statement 14/21: Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251 (PS14/21). In PS14/21 the PRA and FCA provide feedback on the responses to Consultation Paper 6/21: Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251 (CP6/21). It also contains the PRA’s … Continue Reading

Published in OJ – Commission Implementing Regulation extending the transitional period for the treatment of exposures to third-country CCPs under CRR

On 25 June 2021, there was published in the Official Journal of the EU a Commission Implementing Regulation that extends the transitional period during which EU credit institutions can treat exposures to a third-country central counterparty (CCP) that has not been recognised in accordance with the European Market Infrastructure Regulation as if they were exposures … Continue Reading

BoE Discussion Paper – Supervisory stress testing of CCPs

On 21 June 2021, the Bank of England (BoE) issued a Discussion Paper that sets out a range of proposals and options for the design of a central counterparty (CCP) supervisory stress testing framework. The Discussion Paper: Provides a general introduction to CCPs and their own stress testing, to help set the context and motivation … Continue Reading

Published in OJ – Commission Delegated Regulation extending the clearing obligation exemption for pension scheme arrangements

On 16 June 2021, Commission Delegated Regulation (EU) 2021/962 extending the transitional period under Article 89(1) of the European Markets Infrastructure Regulation was published in the Official Journal of the European Union. The Delegated Regulation extends the central clearing exemption for pension scheme arrangements until 18 June 2022. It enters into force on 17 June … Continue Reading

ESMA public statement on the implementation of the FRANDT commercial terms to provide clearing services

On 11 June 2021, the European Securities and Markets Authority (ESMA) issued a statement regarding the implementation of the fair, reasonable, non-discriminatory and transparent (FRANDT) commercial terms to provide clearing services. Key points in the statement include: ESMA is aware that certain clearing members and clients are facing challenges when preparing for the 18 June … Continue Reading

ESMA launches 2021 CCP stress test

On 7 June 2021, the European Securities and Markets Authority (ESMA) issued the framework for its fourth stress test for central counterparties (CCPs). The new stress test exercise has the following components: Credit Stress: assessing CCPs’ resources ability to absorb losses under a combination of market price shocks and member default scenarios. Concentration risk: assessing … Continue Reading

Commission specifies commercial terms for clearing services for OTC derivatives

On 2 June 2021, the European Commission (Commission) adopted a Delegated Regulation specifying the conditions under which commercial terms for clearing services for over-the-counter (OTC) derivatives are to be considered to be fair, reasonable, non-discriminatory and transparent (FRANDT). The statutory basis of the Delegated Regulation is Article 4(3a), third subparagraph, of the European Market Infrastructure … Continue Reading

ESMA’s further proposals regarding the review of the CSDR

On 26 May 2021, the European Securities and Markets Authority (ESMA) published a letter that it had sent to Mairead McGuinness (Commissioner for Financial Services, Financial Stability and Capital Markets Union) raising a number of points regarding the European Commission’s current review of the Central Securities Depositories Regulation (CSDR). ESMA has previously provided the Commission … Continue Reading

ESMA publishes guidelines on the calculation of positions under SFTR

On 25 May 2021, the European Securities and Markets Authority (ESMA) published a final report on guidelines on the calculation of positions in securities financing transactions (SFTs) by trade repositories (TRs) under the Securities Financing Transactions Regulation (SFTR). The report contains an assessment of the feedback received from stakeholders on an earlier consultation paper on … Continue Reading

Commission Delegated Regulation amending Delegated Regulations (EU) No 1003/2013 and (EU) 2019/360 as regards the annual supervisory fees charged by ESMA to trade repositories

On 25 May 2021, there was published in the Official Journal of the EU (OJ) Commission Delegated Regulation (EU) 2021/822 of 24 March 2021 amending Delegated Regulations (EU) No 1003/2013 and (EU) 2019/360 as regards the annual supervisory fees charged by the European Securities and Markets Authority (ESMA) to trade repositories for 2021. The Commission … Continue Reading

IOSCO issues industry surveys on conduct risks in leveraged loans and collateralized loan obligations

On 24 May 2021, the International Organization of Securities Commissions (IOSCO) issued four questionnaires for industry participants on conduct risks in leveraged loans (LL) and collateralized loan obligations (CLO) targeting bank lenders, CLO investors, CLO managers and LL sponsors. The purpose of the questionnaires is to support IOSCO’s project by furthering its understanding of the … Continue Reading

Trade associations’ information statement in accordance with Article 15 UK SFTR

On 20 May 2021, a group of trade associations co-published an information statement in accordance with Article 15 of the UK Securities Financing Transactions Regulation. The information statement provides the reader with information regarding the general risks and consequences that may be involved in consenting to a right of use of collateral provided under a … Continue Reading

A global perspective on derivatives regulation

On 17 May 2021, the International Organisation of Securities Commissions (IOSCO) published a speech by Ashley Alder (CEO Hong Kong Securities and Futures Commission and IOSCO chair) entitled A global perspective on derivatives regulation. Key points in the speech include: Global regulatory authorities are still monitoring the implementation and effectiveness of the post-crisis reforms in … Continue Reading

GFXC publishes Request for Feedback on draft guidance papers for pre-hedging and last look

On 11 May 2021, the Global Foreign Exchange Committee (GFXC) announced that it was seeking industry feedback on draft guidance papers for the usage of ‘pre-hedging’ and ‘last look’ within foreign exchange markets. When finalised the guidance papers will not be part of the FX Global Code but should instead be read alongside it. The … Continue Reading
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