On 19 October 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper regarding the technical standards on conditions which require an extension of authorisation for a central counterparty (CCP), conditions which require validations of a CCP’s changes to models and parameters by a Member State competent authority (NCA) and ESMA and the procedure for consulting the college on whether or not those conditions are met.

The legislative background to the consultation paper is EMIR 2.2 which requires ESMA, in cooperation with the European System of Central Banks, to develop regulatory technical standards (RTS) specifying the conditions under which additional services or activities to which a CCP wishes to extend its business are not covered by the initial authorisation and therefore require an extension of authorisation and also specifying the procedure for consulting the college established in accordance with Article 18 EMIR on whether or not those conditions are met. ESMA must also develop RTS specifying the conditions under which changes to the models and parameters are significant and therefore require validation by an NCA and ESMA.

The deadline for comments on the consultation paper is 15 November 2020.