The Joint Committee of the European Supervisory Authorities (ESAs) has published a letter dated 18 July 2016 from the European Commission responding to concerns they have raised about the delayed adoption of draft regulatory technical standards (RTS) on risk mitigation techniques for non-centrally cleared over-the-counter (OTC) derivatives under the European Market Infrastructure Regulation.
In its response, the Commission states that it is fully committed to implementing the Basel Committee on Banking Supervision – International Organisation on Securities Commissions standards on margins as soon as possible, and agrees that the delay in adopting the draft RTS should be kept as short as possible. The letter also explains that the draft RTS submitted by the ESAs are necessarily lengthy and of a complex technical nature. Given the number and range of market participants that will be required to implement the draft RTS, it is of paramount important that the rules provide clarity and certainty. The delay is caused by the need to complete legal reviews to ensure that those qualities are established. However, the Commission states that it will endeavour to track the international timelines as closely as possible, but cannot confirm exactly what the amended timeline will look like.