Nasdaq OMX has become the first central counterparty (CCP) to be authorised under EMIR.
This has two impacts on the EMIR timetable. Firstly, ESMA will now start the process for deciding whether the classes of derivatives which Nasdaq OMX has been authorised to clear should become subject to the clearing obligation. This process can take up to six months and will include a public consultation. If the classes of derivatives which Nasdaq OMX clears do become subject to the clearing obligation, then contracts in those classes of derivatives entered into since the date of the notification of the authorisation (which we believe to have been 18 March 2014) are at risk of being caught by the frontloading requirements in respect of the clearing obligation.
The classes of derivatives which Nasdaq OMX has been authorised to clear include:
- equity and index derivatives on the Nordic and Baltic markets;
- fixed income derivatives on the Nordic markets; and
- commodity derivatives on Nordic power, emission rights, gas, German and Dutch power as well as physical contracts for the British electricity market and derivatives on these.
Secondly, Nasdaq OMX will now have in place its EMIR compliant client clearing structures. We have prepared a briefing on the EMIR compliant client clearing structures that clearing members will need to have in place as a result, and what clients should consider when reviewing the legal documentation connected with them.
View EMIR – the next challenge…client clearing, 19 March 2014