The Regulation of the European Parliament and Council on OTC Derivatives, CCPs and trade repositories (EMIR) introduces provisions to improve transparency and reduce the risks associated with the OTC derivatives market and establishes common rules for central counterparties (CCPs) and for trade repositories (TRs). It has been identified that common rules are required in the case of CCPs in view of the shift of risk management from a bilateral to a central process for OTC derivatives and in the case of trade repositories because of the increase in information that needs to be reported to them. The Regulation delegates or confers powers to the Commission to adopt regulatory technical standards (RTS) and implementing technical standards (ITS) on a number of areas. This discussion paper covers the draft RTS and ITS which ESMA is required to develop.
ESMA is organising a public hearing on 6 March to give an opportunity to interested stakeholders to discuss the relevant sections of the discussion paper. Please sign up online.
Following this discussion paper and on the basis of the relevant input received, ESMA will prepare draft technical standards to be included in the consultation paper which will most likely be published around summer 2012.
EBA, EIOPA and ESMA are also expected to issue in the coming weeks a joint discussion paper on regulatory technical standards they are required to jointly draft. This joint discussion paper will cover risk mitigation techniques for OTC derivatives that are not cleared by a CCP, notably on capital requirements and exchange of collateral to cover the exposures arising from those transactions and on operational processes for the exchange of collateral, minimum transfer amount and intra-group exemptions.
EBA is also expected to issue in the coming weeks a discussion paper on draft regulatory technical standards on capital requirements for CCPs.
