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 in Financial Instruments Regulation respectively. The draft RTS relate to the benchmark transition away from EONIA and LIBOR and onto new risk-free rates.

Sections 5 and 6 of the final report include the analyses and the conclusions on how to amend the scope of the clearing obligation and derivatives trading obligation respectively and the related implementation timing. These amendments have been finalised with the objective to ensure a smooth transition while maintaining an effective scope for the clearing obligation and derivatives trading obligation, in line with the G20 objectives. In particular, for the clearing obligation, ESMA proposes to remove the EONIA, GBP LIBOR and JPY LIBOR classes, to introduce the Euro Short-Term Rate and Secured Overnight Financing Rate classes and to extend the Sterling Overnight Index Average class. For the derivatives trading obligation, it proposes to remove the GBP LIBOR and USD LIBOR classes. The timeline for the changes are set out on pages 38 to 40 of the final report.

The draft RTS have been submitted to the European Commission. ESMA understands that adoption may take time but believes it would be beneficial to enter the new provisions into force as soon as possible prior to the actual benchmark transition.