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Topic: Clearing and settlement

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ESMA to recognise three UK CCPs from 1 January 2021

On 28 September 2020, the European Securities and Markets Authority announced that three central counterparties (CCPs) established in the UK – ICE Clear Europe Limited, LCH Limited, and LME Clear Limited – will be recognised as third country CCPs (TC-CCPs) eligible to provide their services in the EU, after the end of the transition period … Continue Reading

European Commission report on clearing solutions for pension scheme arrangements under EMIR

On 23 September 2020, the European Commission published a report pursuant to Article 85 of the European Market Infrastructure Regulation (EMIR) that provides an analysis of the main issues identified by stakeholders around pension scheme arrangements’ (PSA) central clearing, as well as of the solutions explored so far. The PSA exemption from central clearing is … Continue Reading

Delegated Regulations supplementing EMIR on tiering, comparable compliance and fees for third-country CCPs published in OJ

On 21 September 2020, the following Delegated Regulations supplementing the European Market Infrastructure Regulation regarding central counterparties (CCPs) established in third countries were published in the Official Journal of the EU (OJ): Commission Delegated Regulation (EU) 2020/1302 of 14 July 2020 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with … Continue Reading

ECON letter to COREPER on proposed Regulation on recovery and resolution of CCPs attaches agreed text

On 3 September 2020, the Council of the EU published a letter from the Chair of the European Parliament’s ECON Committee concerning the proposed Regulation on the framework for the recovery and resolution of central counterparties. The letter explains that at a meeting on 22 July 2020 the Council’s Permanent Representatives Committee (COREPER II) decided … Continue Reading

ESMA recommends priority topics in AIFMD review

On 19 August, the European Securities and Markets Authority (ESMA) published a letter (ESMA34-32-550) dated 18 August that it had sent to the European Commission, outlining areas it should consider during the forthcoming review of the Alternative Investment Fund Managers Directive (AIFMD). ESMA’s letter includes recommendations for changes in 19 areas that ESMA and competent … Continue Reading

FSB questionnaire on continuity of access to FMIs for firms in resolution

On 14 August 2020, the Financial Stability Board (FSB) published a common template for gathering information about continuity of access to financial market infrastructures (FMIs) for firms in resolution. The template takes the form of a questionnaire that all FMIs are encouraged to complete. The questionnaire covers: general information on the FMI and its legal … Continue Reading

ISDA board statement on adherence to the IBOR Fallback Protocol

On 29 July 2020, the ISDA issued a statement on adherence to the IBOR Fallback Protocol. Among other things the statement provides: “As part of its work, ISDA will soon publish the IBOR Fallback Protocol to facilitate inclusion of the new fallbacks in existing non-cleared IBOR derivatives transactions between counterparties that both adhere to the … Continue Reading

ESMA is preparing a new RTS to further postpone CSDR settlement discipline

On 28 July 2020, the European Securities and Markets Authority (ESMA) announced that it was working on a proposal to possibly delay the entry into force of the Central Securities Depositories Regulation (CSDR) settlement discipline regime until 1 February 2022. This is due to the impact of the COVID-19 pandemic on the implementation of regulatory … Continue Reading

Commission adopts Delegated Regulations supplementing EMIR on tiering, comparable compliance and fees for third-country CCPs

On 14 July 2020, the European Commission published the following on its web page dealing with implementing and delegated acts under the European Market Infrastructure Regulation (EMIR): Commission Delegated Regulation (EU) …/… supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to the criteria that ESMA should take into … Continue Reading

ESMA third EU-wide CCP stress test

On 13 July 2020, the European Securities and Markets Authority (ESMA) published the results of its third stress test exercise regarding central counterparties (CCPs) in the EU. The exercise covered the resilience of 16 CCPs, including all authorised EU CCPs and the three UK CCPs. The stress test found that EU CCPs are overall resilient … Continue Reading

ESMA highlights further aspects to consider in the finalisation of the framework for third-country CCPs

On 9 July 2020, the European Securities and Markets Authority (ESMA) published a letter it sent to the European Commission (Commission) as a contribution to the Commission consultation on the delegated acts on tiering, comparable compliance and fees related to third-country central counterparties (TC-CCPs) under the revised European Market Infrastructure Regulation (EMIR 2.2).   ESMA … Continue Reading

AFME: CSDR settlement discipline penalties – market practice for bilateral claims

On 9 July 2020, the Association for Financial Markets in Europe (AFME) issued a document intended to provide guidelines for its members to handle bilateral claims between trading counterparties, related to penalties applied under the CSDR on failed instructions. The document has been created collaboratively by AFME members and is subject to change. The AFME … Continue Reading

EACH updates CSDR settlement discipline framework

On 9 July 2020, the European Association of Clearing Houses (EACH) published an updated version of its CSDR settlement discipline framework. The objective of the framework is to provide the European Securities and Markets Authority, relevant authorities and market participants with details of EACH’s implementation of the CSDR settlement discipline provisions that affect central counterparties … Continue Reading

ESMA updates CSDR Q&As

On 8 July 2020, the European Securities and Markets Authority updated its Q&As on the Regulation on improving securities settlement in the EU and on central securities depositories. Part III of the Q&As dealing with settlement discipline have been updated with the addition of a new item in Q&A 7 dealing with buy-in timeframes. The … Continue Reading

ESMA updates EMIR Q&As

On 8 July 2020, the European Securities and Markets Authority (ESMA) updated its Q&As on the European Market Infrastructure Regulation (EMIR). ESMA has updated Trade Repository Q&A 11(b) clarifying that the counterparties should follow their local time and the relevant calendar of their Member State to specify the “working day” in the context of determining … Continue Reading

Notice of information on postponement of entry into application of MiFIR open access provisions with regard to exchange-traded derivatives

On 3 July 2020, there was published in the Official Journal of the EU (OJ) a Notice of information on postponement of entry into application of MiFIR open access provisions with regard to exchange-traded derivatives. Article 54(2) of MiFIR provides for a transitional period during which Articles 35 or 36 of MiFIR do not apply … Continue Reading

ESRB opinion on ESMA report on post trade risk reduction services with regards to the clearing obligation

On 25 June 2020, the European Systemic Risk Board (ESRB) published an opinion on the earlier European Securities and Markets Authority’s report on post trade risk reduction services with regards to the clearing obligation. The ESRB opinion concludes that while the use of post trade reduction services in non-centrally cleared over-the-counter markets can help to … Continue Reading

ESRB opinion on ESMA report on central clearing solutions for pension scheme arrangements

On 25 June 2020, the European Systemic Risk Board (ESRB) published an opinion on the earlier European Securities and Markets Authority’s (ESMA) report on central clearing solutions for pension scheme arrangements (PSAs). The ESRB opinion concludes that the best way to remove obstacles for PSAs is to promote indirect clearing. The issues faced by PSAs, … Continue Reading

CPMI/IOSCO report – Central counterparty default management auctions

On 25 June 2020, the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report ‘Central counterparty default management auctions – Issues for consideration’. The purpose of the report is to provide a description of the issues that a central counterparty (CCP) should consider when planning and … Continue Reading

Clearing houses: Council Presidency and European Parliament reach political agreement on recovery and resolution

On 23 June 2020, the European Council issued a press release stating that its Presidency and the European Parliament had reached political agreement on a common set of rules for central counterparty (CCP) recovery and resolution. The main objectives of the reforms are: To reduce the probability of CCP failure by introducing effective incentives for … Continue Reading

ESMA guidelines on the reporting to competent authorities under Article 37 of the MMF

On 22 June 2020, the European Securities and Markets Authority (ESMA) published the official translations of its guidelines on reporting to competent authorities under Article 37 of the Money Market Fund Regulation (MMFR). Member State national competent authorities (NCAs) to which the guidelines apply now have two months in which to notify ESMA whether they … Continue Reading

Draft delegated act regarding the systemic importance of third country central counterparties

On 11 June 2020, the European Commission published for consultation a Delegated Regulation supplementing the European Market Infrastructure Regulation (EMIR) with regard to the criteria that the European Securities and Markets Authority (ESMA) should take into account to determine whether a central counterparty (CCP) established in a third country is systemically important or likely to … Continue Reading

Draft delegated act – fees to be charged to third-country CCPs

On 11 June 2020, the European Commission published for consultation a draft Delegated Regulation supplementing the European Market Infrastructure Regulation (EMIR) with regard to fees charged by the European Securities and Markets Authority (ESMA) to central counterparties (CCPs) established in third countries. Article 25d of EMIR provides that ESMA should charge fees to third country … Continue Reading

WFE industry guidance on non-default losses

On 11 June 2020, the World Federation of Exchanges (WFE) issued industry guidance which addresses the treatment of non-default losses. The WFE chair notes that non-default losses may not be the main risk faced by central counterparties (CCPs) but it is still important to have a structured approach to dealing with them. In this way … Continue Reading
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