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ESMA consultation – draft technical advice for clearing services under EMIR

ESMA consultation – Draft technical advice for providing clearing services under EMIR

Background

  • Consultation about draft technical advice on commercial terms for providing clearing services under EMIR (FRANDT)
  • Published on 3 October 2019
  • All interested stakeholders are invited to respond to this consultation. In particular, responses are sought from counterparties acting (or intending to act) as clearing service providers and counterparties that are current or potential clearing clients.
  • The objective of this consultation paper is to seek stakeholders’ feedback on the European Securities and Markets Authority’s (ESMA) draft technical advice to the Commission on how to specify the conditions under which the commercial terms are to be considered to be fair, reasonable, non-discriminatory and transparent (FRANDT) when providing CCP clearing services to clients in accordance with Article 4(3a) of EMIR.

Impacts

EMIR requires many counterparties to clear OTC derivatives that are covered by the clearing obligation through CCPs. To comply with this requirement, counterparties must become clearing members, clients, or must establish indirect clearing arrangements with clearing members, provided that those arrangements do not increase counterparty risk.

In the process leading up to the proposal of EMIR Refit, one of the identified areas which could benefit from targeted action to ensure that the EMIR objectives were reached in a more proportionate, efficient and effective manner was access to central clearing, where in particular counterparties with a limited volume of activity in the OTC derivatives market experienced difficulties. 

Timeline with relevant dates to be logged on regulatory calendar

  • Consultation opens on 3 October 2019
  • Consultation closes on 2 December 2019

Next steps

Any respondents need to send comments to ESMA.

ESMA will consider the feedback it receives to this consultation in Q4 2019.

ESMA expects to publish a final report and to submit the technical advice to the European Commission in Q1 2020.

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