The European Securities and Markets Authority (ESMA) has published two Consultation Papers on draft regulatory technical standards (RTS) for the clearing of interest rate swaps (IRS) and credit default swaps (CDS) under the European Markets Infrastructure Regulation (EMIR).
ESMA has determined that some IRS and CDS classes should be subject to the EMIR clearing obligation. For IRS, the draft RTS propose the following four classes, on a range of currencies and underlying indices, should be subject to central clearing:
- basis swaps;
- fixed-to-float interest rate swaps;
- forward rate agreements; and
- overnight index swaps.
For CDS, the draft RTS propose that European untranched index CDS (for two indices) should be subject to central clearing.
The deadline for responding to the Consultation Papers on IRS and CDS are, respectively, 18 August 2014 and 18 September 2014.
ESMA will use the responses to its Consultation Papers to prepare final draft RTSs, which it will send to the European Commission for endorsement. The clearing obligation will take effect following a phased implementation, with the current proposal ranging from six months to three years after the entry into force of the RTS, depending on the types of counterparties concerned.
View Consultation Paper – Clearing obligation under EMIR (no.1), 11 July 2014
View Consultation Paper – Clearing obligation under EMIR (no.2), 11 July 2014