The European Securities and Markets Authority (ESMA) has published a consultation paper concerning the draft regulatory technical standards (RTS) that amend Commission Delegated Regulation No. 153/2013 with regard to RTS on requirements for central counterparties (CCPs) on the time horizons for the liquidation period. The consultation paper explains the rationale and the scope of the review of Article 26 of RTS No. 153/2013 that ESMA has carried out, summarises the answers received following the publication of an earlier discussion paper and raises questions seeking views on proposed amendments to Article 26 of RTS No. 153/2013.
In particular ESMA notes that respondents to the earlier discussion paper outlined the advantages or the inconveniences linked to a gross omnibus account. ESMA believes that for many respondents it was not clear that ESMA had suggested the introduction of an additional option currently not available under the EMIR framework, but that could be made available to third country CCPs via equivalence. This additional option would not replace the existing account structures, therefore an omnibus segregated account net (margined at two days) would still be available.
“Overall, ESMA believes that the drawbacks do not outweigh the benefits to introduce such type of account structure in the European regulation to ensure a level playing field with other jurisdictions. Therefore, a draft of amended regulatory technical standards is proposed in this consultation paper. In addition, to limit the risks that a reduction of the liquidation period might have for CCPs, they should collect intraday margins. It is also proposed to facilitate the porting of the position that the client is known to the CCP and that the clearing member’s affiliates’ positions of should not be commingled with its clients’ positions. However, following the strong objection by stakeholders to the requirement for a pre-existing arrangement with a back-up clearing member due to legal and operational obstacles and to the cost linked to additional capital requirements, ESMA is not introducing such a provision in the RTS.”
The deadline for comments on the consultation paper is 1 February 2016.
View ESMA consults on margin period of risk for CCPs’ client accounts, 14 December 2015