ESMA offers two-year extension for OTC clearing rule
13 July 2016 Paris
Image: Shutterstock
The European Market Infrastructure Regulation’s (EMIR) requirement for central clearing of over-the-counter (OTC) derivatives may be pushed back by two-years for small counterparties.
The European Securities and Markets Authority (ESMA) has published a consultation paper proposing a delay to EMIR’s phase-in period for category three counterparties with a limited volume of OTC derivative business.
The extended phase-in period will allow affected counterparties more time to meet the minimum volume and cost requirements of becoming a direct clearing member of a central counterparty (CCP), according to ESMA
The regulator also cited challenges for some counterparties around infrastructure needs, adequate resources and minimum capital requirements, along with risks, such as mutualisation of default fund resources, as its reasons to propose the delay.
The consultation window closes on 5 September and ESMA will publish its final report by the end of the year.
The European Securities and Markets Authority (ESMA) has published a consultation paper proposing a delay to EMIR’s phase-in period for category three counterparties with a limited volume of OTC derivative business.
The extended phase-in period will allow affected counterparties more time to meet the minimum volume and cost requirements of becoming a direct clearing member of a central counterparty (CCP), according to ESMA
The regulator also cited challenges for some counterparties around infrastructure needs, adequate resources and minimum capital requirements, along with risks, such as mutualisation of default fund resources, as its reasons to propose the delay.
The consultation window closes on 5 September and ESMA will publish its final report by the end of the year.
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