{"id":170369,"date":"2014-10-01T16:56:57","date_gmt":"2014-10-01T16:56:57","guid":{"rendered":"https:\/\/wordpress-693215-2610341.cloudwaysapps.com\/index.php\/2014\/10\/01\/esma-defines-products-counterparties-and-starting-dates-for-the-clearing-of-interest-rate-swaps\/"},"modified":"2014-10-01T16:56:57","modified_gmt":"2014-10-01T16:56:57","slug":"esma-defines-products-counterparties-and-starting-dates-for-the-clearing-of-interest-rate-swaps","status":"publish","type":"post","link":"https:\/\/theotcspace.com\/esma-defines-products-counterparties-and-starting-dates-for-the-clearing-of-interest-rate-swaps\/","title":{"rendered":"ESMA defines products, counterparties and starting dates for the clearing of interest rate swaps"},"content":{"rendered":"

It's hot news, the start of mandated Clearing grows nearer.<\/p>\n

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ESMA has finally set the European Union on course to require firms to clear OTC IRS trades. <\/p>\n

Here's the announcement from ESMA:<\/p>\n

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The European Securities and Markets Authority (ESMA) has today issued final draft regulatory technical standards (RTS) for the central clearing of Interest Rate Swaps (IRS) which it is required to develop under the European Markets Infrastructure Regulation (EMIR).      The RTS define those types of IRS contracts which will have to be centrally cleared, the types of counterparties covered by the obligation and the dates by which central clearing of IRS will become mandatory for them.<\/p>\n

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EMIR introduces the obligation to clear certain classes of OTC derivatives in central clearing houses (CCPs) which are either European CCPs authorised by national authorities or third-country CCPs recognised by ESMA. Central clearing of OTC derivatives is part of the G20 commitments aimed at reducing risk in the global financial system and requires a process for the identification of classes of OTC derivatives that should be subject to mandatory clearing. ESMA’s assessment is based on a number of criteria, including liquidity, price availability and standardisation. <\/p>\n

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Four IRS classes will need to be centrally cleared<\/p>\n

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ESMA’s IRS RTS define the following four IRS classes to be subject to central clearing:<\/p>\n