May 21, 2013

EMIR developments | Round up

RTS defining contracts with ‘direct, substantial and foreseeable effect’

A letter was sent from the European Commission to ESMA requesting the delivery of draft Recommended Technical Standards (RTS) defining contracts which, although transacted between 3rd country counterparties  seemingly outside the scope of EMIR regulation, could be deemed to have ‘direct, substantial and foreseeable effect’ in the EU, and could therefore be deemed to be in scope under EMIR. This draft RTS is requested for delivery  by 25th September 2013, therefore a short ESMA consultation is expected beginning in June/July, addressing this issue. The letter can be found here.

Clearing process

I understand that ESMA will publish a Discussion Paper (for consultation) this summer on application of the clearing requirement. This Discussion Paper will address issues around frontloading among many issues addressed (including elaborating on ‘remaining minimum maturity’). ESMA hopes to have reached conclusions by end-2013 on the key questions addressed, so that it can begin applying the clearing requirement from late 2013/early 2014. (Personally, I do not expect mandatory clearing to take place earlier than late 2014)


The next round of EMIR Q&A will be published some time after an ESMA Board of Supervisors meeting on 22nd May – which is expected to sign off these Q&A. Some of the questions posed by ISDA to ESMA on portfolio reconcilliation, NFCs, Timely Confirmation, Reporting etc. will be included in the forthcoming Q&A.

3rd country CCP recognition under EMIR and EC equivalence decisions re 3rd country jurisdictions

A memo was published by the European Commission on 13th May 2013, addressing 3rd country equivalence by the EC and recognition of 3rd country CCPs by ESMA.  Note the following:

  • The paper indicates a delay in sending of the 2nd set of equivalence advice from ESMA – now 15th Sept rather than 15th July 2013
  • The EC stresses that this process is "outcome-focused" and emphasize that equivalence is not a pre-condition for application by 3rd country CCP for recognition.

Maria L.

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