24 February 2018
Visit www.capgemini.com/worldreports

EU Parliament votes through OTC rules

29 March 2012  |  7333 views  |  1 EU building, Brussels

European lawmakers have approved tough new rules governing trading in the over-the-counter derivatives market.

The regulation - approved by an overwhelming majority in Parliament - lays down that OTC derivative contracts would have to be cleared through central counterparties (CCPs), and that all derivatives contracts would have to be reported to trade repositories.

The proposal covers all segments of the OTC derivatives market, including interest rate, credit, equity, foreign exchange and commodities.

The work of the new breed of trade repositories would be monitored by the European Securities and Markets Authority (Esma), which would be responsible for granting or withdrawing their registration and for mediating in disputes among national authorities over the authorisation of CCPs.

MEPs secured a "light touch" regime for pension schemes with regard to the clearing obligation. For these schemes, the obligation would not apply for three years, extendable by another two years plus one, subject to proper justification.

The new rules are expected to come into force by early next year, following the development of technical standards by European supervisory authorities. They will be subject to review and possible amendment within three years.

Welcoming the vote, EU Commissioner Miachael Barnier called on the US and other jurisdictions around the globe to hasten their efforts to bring the derivatives markets to heal and ensure alignment of regulatory provisions worldwide.

Comments: (1)

A Finextra member
A Finextra member | 29 March, 2012, 18:10

This is a very major move and one that is fraught with danger for financial markets. As always the devil will be in the detail but it looks like costs in Financial markets are about to go up and by huge ammounts. The Post Trade Forum hosted by the London Stock Exchange will be debating the risks in CCPs and possible long term benefits. See Post Trade Forum on this site for booking details

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

OTC clearing rules to spur big tech spending - Tabb

OTC clearing rules to spur big tech spending - Tabb

29 September 2011  |  8329 views  |  0 comments
Dodd-Frank will push 60% of OTC volumes to central clearing

Dodd-Frank will push 60% of OTC volumes to central clearing

13 July 2011  |  12187 views  |  0 comments
OTC derivatives market reform stalling - FSB

OTC derivatives market reform stalling - FSB

18 April 2011  |  11352 views  |  0 comments
EC bids to tame 'wild west territory' of OTC derivatives and short selling

EC bids to tame 'wild west territory' of OTC derivatives and short selling

15 September 2010  |  8559 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit www.vasco.comVisit https://www.capgemini.comvisit www.ebaday.com

Top topics

Most viewed Most shared
Ripple makes new connections to emerging marketsRipple makes new connections to emerging m...
11615 views comments | 16 tweets | 10 linkedin
hands typing furiouslySome Interesting Applications Of The Inter...
10276 views 3 | 9 tweets | 1 linkedin
Basel Committee outlines disruptive fintech scenariosBasel Committee outlines disruptive fintec...
8397 views comments | 15 tweets | 26 linkedin
Investment Association sets up fintech accelerator for asset managersInvestment Association sets up fintech acc...
7949 views comments | 19 tweets | 10 linkedin
R3 creates Legal Centre of Excellence for blockchain technolgyR3 creates Legal Centre of Excellence for...
7664 views comments | 10 tweets | 14 linkedin

Featured job

Competitive
Germany, Austria or Switzerland

Find your next job