Source: European Commission
The European Commission has today adopted nine regulatory and implementing technical standards to complement the obligations defined under the Regulation on OTC derivatives, central counterparties (CCPs) and trade repositories (the so-called European Markets Infrastructure Regulation - EMIR) which was adopted on 4 July and entered into force on 16 August 2012.
They were developed by the European Supervisory Authorities and have been endorsed by the European Commission without modification. The adoption of these technical standards finalises requirements for the mandatory clearing and reporting of transactions, in line with the EU's G20 commitment made in Pittsburgh in September 2009.
Internal Market and Services Commissioner Michel Barnier said: "The adoption of these technical standards is the final step in achieving the mandatory clearing and reporting of OTC derivatives and in meeting our G20 commitments. This will improve transparency in the trading of derivatives."
The technical standards will enter into force on the twentieth day following publication in the EU's Official Journal. As with any other EU Regulation, their provisions will be directly applicable (i.e. legally binding in all Member States without implementation into national law) from the day of entry into force.
One technical standard submitted by the European Securities and Markets Authority (ESMA) on the specific point of colleges for central counterparties was not endorsed because of concerns as to the legality of some of the provisions. The European Commission will ask ESMA to redraft the standard and it will be adopted at a later stage. However, this will not affect the timing of the clearing obligation, or the timing of authorisation of CCPs under EMIR, since the provisions of this technical standard are not a prerequisite for CCPs to begin applying for authorisation under EMIR.
Key elements of the technical standards adopted today:
With regard to OTC (over-the-counter) derivatives, the regulatory technical standards specify the provisions of the European Market Infrastructure Regulation (EMIR) related to indirect clearing arrangements, the clearing obligation procedure, the public register, access to a trading venue, non-financial counterparties, and risk mitigation techniques for OTC derivatives contracts not cleared by a CCP.
With regard to central counterparties, the regulatory technical standards specify the provisions of EMIR related to the requirements for CCPs, as well as the capital, retained earnings and reserves of a CCP. The implementing technical standards specify the format of the records to be maintained by CCPs.
With regard to trade repositories, the regulatory technical standards specify the provisions of EMIR related to the minimum details of the data to be reported to trade repositories, the details of the application for registration as a trade repository, as well as the data to be published and made available by trade repositories and operational standards for aggregating, comparing and accessing the data. The implementing technical standards specify the format and frequency of trade reports to trade repositories and the format of applications for registration of trade repositories.
The regulatory technical standards will be published in the Official Journal of the European Union immediately following the receipt of 'non-objection' from the European Parliament and Council. The European Parliament and Council have one month to exercise their right of scrutiny, with this period extendable by an additional one month at their initiative. The regulatory technical standards will then enter into force on the twentieth day following that of their publication.
The implementing technical standards are not subject to the right of scrutiny of the European Parliament and Council. They will therefore be published in the Official Journal of the European Union right after their adoption and will enter into force on the twentieth day following that of their publication. Nevertheless, the provisions under the implementing technical standards will only take effect once the associated regulatory technical standards enter into force, since the provisions defined in the implementing acts complement provisions defined in the related regulatory technical standards and are not stand-alone obligations.