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Topic: Clearing and settlement

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ESMA paper – Methodology for Mandatory Peer Reviews in relation to CCPs’ authorisation and supervision under EMIR

On 5 January 2022, the European Securities and Markets Authority (ESMA) issued a paper ‘Methodology for Mandatory Peer Reviews in relation to CCPs’ authorisation and supervision under EMIR’. The European Markets Infrastructure Regulation (EMIR), as amended by European Regulation No 2019/2099 (EMIR 2.2) requires ESMA to undertake, at least annually, a peer review analysis of … Continue Reading

Annual Report on the Bank of England’s supervision of FMIs

On 14 December 2021, the Bank of England (BoE) published its 2021 Annual Report which sets out how it has exercised its responsibilities in respect of supervising financial market infrastructure firms (FMIs) and outlines the BoE’s domestic and international policy work to strengthen the regulatory and supervisory frameworks for FMIs. Chapter 4 of the Annual … Continue Reading

FSB publishes implementation progress of OTC derivatives market reforms in 2021

On 3 December 2021, the Financial Stability Board (FSB) published a report regarding the implementation progress of over-the-counter (OTC) derivatives market reforms in 2021. The report tracks the international progress in implementing G20 reforms to global OTC derivatives markets following the 2008 global financial crisis. The following progress has been made since the previous annual … Continue Reading

Derivatives clearing obligation – introduction of contracts referencing TONA: Amendment to BTS 2015/2205

On 3 December 2021, the Bank of England (BoE) published a Policy Statement containing its final policy on the proposal to add Overnight Index Swaps (OIS) that reference TONA to the scope of contracts subject to the derivatives clearing obligation. The BoE’s final policy maintains the proposal in an earlier consultation to add TONA OIS … Continue Reading

IOSCO and CPMI publish a discussion paper on client clearing: access and portability

On 29 November 2021, the Committee on Payments and Market Infrastructures (CPMI) and the Board of the International Organization of Securities Commissions (IOSCO) published a discussion paper on client clearing. The discussion paper considers issues concerning access to central counterparties (CCPs) and effective porting practices. The discussion paper does not intend to provide guidance on … Continue Reading

FCA and BoE consult on changes to reporting requirements under UK EMIR

On 25 November 2021, the FCA and Bank of England (BoE) co-published Consultation Paper 21/31: Changes to reporting requirements, procedures for data quality and registration of trade repositories under UK EMIR (CP21/31). In CP21/31 the regulators are setting out three proposals: Amendments to the framework for derivatives reporting under Article 9 of UK European Market … Continue Reading

ESMA seeks input on EMIR clearing threshold framework

On 22 November 2021, the European Securities and Markets Authority (ESMA) issued a document on EMIR clearing thresholds. EMIR Refit introduces a mandate for ESMA to periodically review the clearing thresholds and update them where necessary, in order to ensure that the thresholds remain appropriate (e.g., to take account of any material changes in financial … Continue Reading

ESMA final report on technical standards for commodity derivatives

On 22 November 2021, the European Securities and Markets Authority (ESMA) published its final report, ‘Technical standards for commodity derivatives’. Under the MiFID II Recovery Package, position limits will only continue to apply to agricultural commodity derivatives and to critical or significant commodity derivatives defined in Level 1 as commodity derivatives with a net open … Continue Reading

ESMA consults on CCP investment practices for highly liquid financial instruments

On 18 November 2021, the European Securities and Markets Authority (ESMA) issued a consultation paper on whether the list of financial instruments that are considered highly liquid with minimal market and credit risk, in accordance with Article 47 of the European Market Infrastructure Regulation (EMIR), could be extended to include one or more money market … Continue Reading

ESMA public consultations on CCP Resolution Regime

On 18 November 2021, the European Securities and Markets Authority (ESMA) issued six consultation papers containing draft regulatory technical standards (RTS) on: Resolution colleges. The valuation of central counterparties’ (CCPs) assets and liabilities in resolution. The safeguards for clients and indirect clients. The content of resolution plans. The consultation papers also contain draft guidelines on: … Continue Reading

ESMA proposes changes to the scope of the clearing and derivative trading obligations for benchmark transitions

On 18 November 2021, the European Securities and Markets Authority (ESMA) published a final report on draft regulatory technical standards (RTS) that amend the RTS on the clearing obligation and on the derivative trading obligation that ESMA has developed under Article 5(2) of the European Market Infrastructure Regulation and under Article 32 of the Markets … Continue Reading

Commissioner McGuinness announces proposed way forward for central clearing

On 10 November 2021, the European Commission published a statement by the Commissioner for Financial Services, Financial Stability and Capital Markets Union, Mairead McGuinness. In her statement Commissioner McGuinness states that the Commission will propose an extension of the equivalence decision for UK CCPs in early 2022. However, Commissioner McGuinness also adds that this extension … Continue Reading

The Bank of England’s approach to tiering incoming CCPs

On 8 November 2021, the Bank of England (BoE) issued a Consultation Paper and a draft Statement of Policy on its approach to ‘tiering’ non-UK central counterparties (CCPs) based on the level of systemic risk they could pose to UK financial stability. The consultation closes on 25 February 2022. Under the BoE’s tiering proposals: Incoming … Continue Reading

BoE launches first public CCP supervisory stress test

On 19 October 2021, the Bank of England (BoE) launched its first public supervisory stress test of UK central counterparties (CCPs). As stated in the earlier BoE Discussion Paper on CCP supervisory stress testing, the 2021-22 stress test will explore the system-wide credit and liquidity resilience of UK CCPs. The findings from the stress test … Continue Reading

CPMI calls for ideas on solutions to expand PvP settlement

On 7 October 2021, the Committee on Payments and Market Infrastructures (CPMI) issued a call for ideas on payment-versus-payment (PvP) mechanisms. As part of the G20 cross-border payments roadmap, the CPMI is developing proposals for increased PvP adoption by encouraging enhancements to existing PvP arrangements and/or the design of new public and/or private sector solutions. … Continue Reading

FSB / IMF latest progress report on the G20 Data Gaps Initiative

On 8 October 2021, the Financial Stability Board and the International Monetary Fund co-published their sixth progress report on the G20 Data Gaps Initiative. Key messages in the progress report include: Significant progress has been achieved during phases 1 and 2 of the Data Gaps Initiative in closing identified policy-relevant data gaps. Although the initiative … Continue Reading

ECSDA issues updated CSDR penalties framework

On 5 October 2021, the European Central Securities Depositories Association (ECSDA) published an updated version of the ECSDA CSDR Settlement Fails Penalties Framework. The current version of the document provides the changes in comparison with the previous one highlighted in grey and the assumptions pending European Securities and Markets Authority and European Commission feedback in … Continue Reading

FMSB publishes Spotlight Review on examining hybrid working risks in FICC markets

On 30 September 2021, the FICC Markets Standards Board (FMSB) published a Spotlight Review which examines hybrid working risks in the wholesale fixed income, currencies and commodities (FICC) markets. The FMSB is a private sector, market led organisation created as a result of the recommendations in the Fair and Effective Markets Review (FEMR) Final Report … Continue Reading

New ESMA Q&As available

On 30 September 2021, the European Securities and Markets Authority announced that it had updated its Questions and Answers on the following: EMIR implementation. SFTR data reporting. MiFID II and MiFIR transparency topics.… Continue Reading

BoE papers on derivatives clearing obligation

On 29 September 2021, the Bank of England (BoE) published a policy statement setting out its final policy on the proposal to modify the scope of contracts subject to the derivatives clearing obligation, which was set out in a consultation paper that the BoE published earlier this year (Derivatives clearing obligation – modifications to reflect … Continue Reading

BoE Dear CEO letters – supervisory expectations in relation to material outsourcing to the public cloud

On 29 September 2021, the Bank of England (BoE) published the following: Dear CEO letter to central counterparties (CCPs) setting out supervisory expectations in relation to material outsourcing to the public cloud. The first annex to the Dear CEO letter sets out the BoE’s expectations in relation to material outsourcing arrangements. The second annex sets … Continue Reading

ESMA recommends to Commission to delay buy-in rules

On 24 September 2021, the European Securities and Markets Authority (ESMA) published a letter it had sent to the European Commission regarding the implementation of the Central Securities Depositories Regulation (CSDR), urging it to consider a delay of the mandatory buy-in regime. As the final Commission legislative proposal for the review of the CSDR, possibly … Continue Reading

ESMA guidelines on settlement fails reporting

On 24 September 2021, the European Securities and Markets Authority (ESMA) issued a final report containing guidelines on settlement fails reporting under Article 7 of the Central Securities Depositories Regulation (CSDR). ESMA has produced the guidelines in order to ensure the consistent application of Article 7(1) of the CSDR as supplemented by Articles 14 and … Continue Reading

ROC publishes revised version of the CDE Technical Guidance

On 22 September 2021, the Regulatory Oversight Committee (ROC) of the Global Legal Entity Identifier published a revised version of the CDE Technical Guidance which includes corrections that the ROC considers appropriate to facilitate its jurisdictional implementations. In developing these corrections, the ROC considered the responses to a public consultation that was run between 5 … Continue Reading
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