06 December 2016
Visit aciworldwide.com

EU Parliament votes through OTC rules

29 March 2012  |  6997 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  |  8027 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  |  11901 views  |  0 comments
OTC derivatives market reform stalling - FSB

OTC derivatives market reform stalling - FSB

18 April 2011  |  10420 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  |  8278 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Find out moreVisit capgemini.comVisit aciworldwide.com

Who is commenting?

Top topics

Most viewed Most shared
Royal Mint to issue digital goldRoyal Mint to issue digital gold
6949 views comments | 23 tweets | 24 linkedin
Bank CEOs fret about ROI as startups drive IT arms raceBank CEOs fret about ROI as startups drive...
6065 views comments | 16 tweets | 21 linkedin
hands typing furiouslyBanking UX Design Challenges and Opportuni...
5947 views 0 | 12 tweets | 5 linkedin
OCC to offer fintech firms bank charter statusOCC to offer fintech firms bank charter st...
5920 views comments | 22 tweets | 15 linkedin
Amazon signs up tech firms to financial services cloud programmeAmazon signs up tech firms to financial se...
5905 views comments | 14 tweets | 15 linkedin

Featured job

to Six-Figure Base, Commission, Benefits
London, UK

Find your next job