Tag: Clearing and settlement

Opinion of the ECB on a proposal for a regulation amending the Central Securities Depositories Regulation

On 26 September 2022, the European Central Bank (ECB) published an opinion on a proposal for a Regulation amending the Central Securities Depositories Regulation. In addition to welcoming the proposed Regulation and setting out certain general observations, the opinion also provides specific observations on the following: Settlement discipline regime. Cooperation between competent authorities and relevant … Continue Reading

Commission letter to the EBA and ESMA on response to the current level of margins and of excessive volatility in energy derivatives market

On 15 September 2022, the EBA published a letter that the European Commission had sent to both it and the European Securities and Markets Authority regarding a response to the current level of margins and of excessive volatility in energy derivatives markets. The letter outlines that, with the sharp rise in gas and electricity prices … Continue Reading

CPMI /IOSCO report ‘Client clearing: access and portability’

On 8 September 2022, the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report ‘Client clearing: access and portability’. The report considers the benefits and challenges of new access models to central counterparty (CCP) clearing and client-position portability. The report: Describes “direct” and “sponsored” access models … Continue Reading

ESMA MoU with South Africa’s Financial Sector Conduct Authority, Prudential Authority and the South African Reserve Bank

On 11 August 2022, the European Securities and Markets Authority (ESMA) published a Memorandum of Understanding (MoU) between itself and South Africa’s Financial Sector Conduct Authority, Prudential Authority and the South African Reserve Bank related to central counterparties (CCPs) established in South Africa. By signing the MoU, the signatories affirm their willingness to cooperate and … Continue Reading

ESMA updates list of third-country CCPs recognised to offer services and activities in the EU

On 11 August 2022, the European Securities and Markets Authority published an updated list of third-country central counterparties recognised to offer services and activities in the EU in accordance with the European Markets Infrastructure Regulation.  … Continue Reading

Commission report on the treatment of CCP equity in the write-down and conversion tool under the Regulation on CCP recovery and resolution

On 10 August 2022, the European Commission published a report to the European Parliament and the Council on the treatment of central counterparty (CCP) equity in the write-down and conversion tool under the Regulation on CCP recovery and resolution (CCP-RRR). Under Article 27(7) of the CCP-RRR, the resolution authority must write down and convert any … Continue Reading

CPMI / IOSCO discussion paper on CCP practices to address non default-losses

Introduction On 4 August 2022, the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a discussion paper on central counterparty (CCP) practices to address non default-losses (NDLs). Non default events can threaten a CCP’s viability as a going concern and its ability to continue providing critical services. … Continue Reading

ESMA updates Q&As on the implementation of the CSDR

On 3 August 2022, the European Securities and Markets Authority (ESMA) updated its Q&As on the implementation of the Central Securities Depositories Regulation (CSDR). The updated Q&As amend settlement discipline question 3 – cash penalties. The question has now been updated to include answers to the following: Article 3(2) of Commission Delegated Regulation 2017/389 provides … Continue Reading

ESMA launches call for Evidence on Pre-Hedging

On 29 July 2022, the European Securities and Markets Authority (ESMA) published a call for evidence on pre-hedging. The aim is to promote discussion among stakeholders and gather further evidence on the practice of pre-hedging that could help ESMA to develop appropriate guidance. The call for evidence illustrated the arguments in favour and against such … Continue Reading

ESMA speech ‘Key trends in cleared derivatives’

On 13 July 2022, the European Securities and Markets Authority (ESMA) published a speech by Klaus Löber (Chair of ESMA’s CCP Supervisory Committee (CCP SC)). Key points in the speech include: The COVID-19 pandemic and then the Russian invasion of Ukraine have had major repercussions on financial markets. But from a central counterparty (CCP) perspective … Continue Reading

PRA and FCA jointly consult on amendments to BTS on margin requirements for non-centrally cleared derivatives

On 12 July 2022, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) jointly published Consultation Paper 22/13 ‘Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251’ (CP22/13). The introduction of the bilateral margining requirements were implemented in the UK by the onshored European Market Infrastructure Regulation (EMIR) and BTS 2016/2251. When compared … Continue Reading

ESMA consults on the clearing and derivative trading obligations in view of the 2022 status of the benchmark transition

On 11 July 2022, the European Securities and Markets Authority (ESMA) published a consultation paper on the clearing obligation (CO) and derivative trading obligation (DTO) in view of the 2022 status of the benchmark transition. The consultation paper contains draft regulatory technical standards (RTS) that complement an earlier set of RTS that removed EONIA and … Continue Reading

ESMA consults on cash penalty process for cleared transactions

On 11 July 2022, the European Securities and Markets Authority (ESMA) issued a consultation paper on a possible amendment to the Central Securities Depositories Regulation cash penalty process for cleared transactions. The ESMA’s proposal consists in removing the separate process established in Article 19 of Delegated Regulation (EU) 2018/1229 for the collection and distribution of … Continue Reading

FSB report on options to improve adoption of the LEI

On 7 July 2022, the Financial Stability Board (FSB) published a report exploring options to improve the adoption of the Legal Entity Identifier (LEI), in particular for use in cross-border payments. The report explores benefits that could accrue from the use of the LEI in cross-border payment systems and, in close coordination with the Global … Continue Reading

ESMA updates on third country CCPs’ applications for recognition

On 8 July 2022, the European Securities and Markets Authority (ESMA) issued a public statement providing an update on those third country central counterparties’ (TC-CCPs) applications for recognition under the European Market Infrastructure Regulation (EMIR) that were suspended until 28 June 2022. Among other things the public statement notes: As regards TC-CCPs which are established … Continue Reading

Commission Delegated Regulation amending the RTS on settlement discipline as regards the date of application of the provisions related to the buy-in regime

On 6 July 2022, the European Commission published Commission Delegated Regulation (EU) of 6.7.2022 amending the regulatory technical standards (RTS) laid down in Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) as regards the date of application of the provisions related to the buy-in regime. The Delegated Regulation suspends the application of the provisions relating … Continue Reading

4th ESMA stress test exercise for CCPs

On 5 July 2022, the European Securities and Markets Authority (ESMA) published the results of its fourth stress test exercise of central counterparties (CCPs). The results confirm the overall resilience of EU CCPs, as well as third-country tier 2 CCPs, to credit, concentration and operational risks under the tested scenarios and implemented framework. However, the … Continue Reading

Bank of England’s final policy on EMIR 2.2 implementation and consultation on fees for non-UK FMIs

On 30 June 2022, the Bank of England (BoE) published a Policy Statement and a Statement of Policy on its approach to ‘tiering’ non-UK central counterparties (incoming CCPs) based on the level of risk they could pose to UK financial stability. The BoE has also published a Policy Statement and a Statement of Policy on … Continue Reading

FMSB Statement of Good Practice on Trading Platform Disclosure

On 28 June 2022, the Financial Markets Standards Board issued a Statement of Good Practice on Trading Platform Disclosures. The Statement is intended to develop best practices around what platform operators should disclose to their participants. It builds on certain existing regulatory requirements and policy initiatives impacting platform operators and users, including relevant aspects of … Continue Reading

Published in OJ – Commission equivalence decisions for CCPs in China and Israel

On 24 June 2022, there was published in the Official Journal of the EU (OJ): Commission Implementing Decision (EU) 2022/984 of 22 June 2022 on the equivalence of the regulatory framework of the People’s Republic of China for central counterparties (CCPs) that are authorised to clear OTC derivatives in the interbank market and supervised by … Continue Reading

Commission adopts two equivalence decisions for Chinese and Israeli CCPs

On 22 June 2022, the European Commission adopted two equivalence decisions for central counterparties (CCPs) under the supervision of the People’s Bank of China and the Israel Securities Authority. Both equivalence decisions do not come into force until published in the Official Journal of the EU. The equivalence decisions follow the recent decisions adopted for … Continue Reading

European Commission considers Euro-clearing overhaul

On 16 June 2022 the European Commission hosted a meeting of the Derivatives and Market Infrastructures Member States Working Group, which is an expert group composed of Member States’ representatives. The agenda for the meeting included consideration of possible legislative and non-legislative measures to be developed in the context of the European clearing strategy announced … Continue Reading

ESMA public statement on implementation of the clearing obligation for pension scheme arrangements

On 16 June 2022, the European Securities and Markets Authority (ESMA) published a public statement regarding the implementation of the clearing obligation for pension scheme arrangements. The statement refers to the European Commission publishing on 9 June 2022 a Delegated Act exempting pension scheme arrangements from the clearing obligation until 18 June 2023. The statement … Continue Reading

ESAs propose extending temporary exemptions regime for intragroup contracts during EMIR review

On 13 June 2022, the European Supervisory Authorities (ESAs) published a final report with draft regulatory technical standards (RTS) proposing to amend Commission Delegated Regulation (EU) 2016/2251 on bilateral margin requirements. The European Securities and Markets Authority has also published a final report with a new draft RTS proposing to amend accordingly the three Commission … Continue Reading
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