Scanning Special June 2014

What’s next? ESMA is now drafting the regulatory technical standards laying down the clearing obligation. ESMA itself considers that this process will re- quire up to six months. ESMA inserted the information about the author- ised CCP and its authorised products for clearing in the consolidated register.

and accurate reconstruction of the operational process can be conducted. What’s next? The consultation is open until 22 May 2014. ESMA will finalise its proposed DTS based on the feedback from stakeholders responding to this consultation paper. Then, ESMA will deliver the final DTS to the European Commission, to be adopted as an EU-wide immediately enforcea- ble Regulation. The CSDR adopted by the European Parliament Background The commission proposal has been issued on 7 March 2012. A political compromise was reached on 18 De- cember 2013 between the Council and the Euro- pean Parliament. What’s in there? On 15 April 2014, the European Parliament for- mally adopted the Central Securities Depositories Regulation (CSDR). For the first time a regulatory framework will be in place for central securities depositories in the EU. The CSDR is another important part in the framework of EMIR (which regulates OTC deriv- atives clearing, central counterparties and trade repositories), Target2Securities (T2S), which aims to create a single settlement engine, and the Set- tlement Finality Directive (Directive 98/26/EC). It THE DISCUSSION PAPER IS AVAILABLE HERE.

also fits in the context of the EU’s efforts regard- ing MiFID II that regulates trading environments. The CSDR aims to dematerialise all securities by transforming them into book entry form in order to accelerate settlement cycles. It harmonises settlement periods and settlement discipline re- gimes across the EU. The Regulation also foresees a “passporting” re- gime for central securities depositories providing services throughout the EU or wanting to set up a branch in another Member State. In addition, the Regulation sets clear organisational require- ments for central securities depositories and it provides restrictions on the direct provision by CSDs of banking services ancillary to the settle- ment process. The Regulation is completed by provisions on sanctions. What’s next? The Regulation will enter into force twenty days following its publication which is foreseen for the third quarter of 2014. Article 5 on settlement cycle (T+2) will enter into force on 1 January 2015 and Article 3(1) on dematerialisation of securities will apply from 1 January 2015 for transferable securities issued after that date and from 1 January 2020 for all transferable securities. ESMA will issue draft reg- ulatory technical standards on issues such as or- ganisational requirements, settlement discipline and the information that has to be provided to obtain authorisation. The list of authorised CCPs under EMIR updated Background ESMA maintains a list of CCPs that have been au- thorised to offer services and activities in the EU in accordance with EMIR. What’s in there? ESMA has updated its list of Central Counterpar- ties (CCPs) that have been authorised to offer services and activities in the Union in accordance with EMIR as follows: THE TEXT OF THE REGULATION IS AVAILABLE HERE.

THIS CONSOLIDATED REGISTER CAN BE FOUND HERE.

Consultation Paper on risk-mitigation techniques for OTC-derivatives Background EMIR (Regulation 648/2012) establishes provi- sions aimed at increasing the safety and trans- parency of the OTC derivatives markets. Among other requirements, it introduces a legal obligation to clear certain types of OTC derivatives through central counterparties (CCP). However, not all OTC derivative transactions will be subject to the clearing obligation or will meet the conditions to be centrally cleared. In the absence of clearing by a CCP, counterparties must apply risk mitigation techniques to their bilateral relationships to reduce counterparty credit risk. What’s in there? ESMA, EBA and EIOPA have launched on 14 April 2014 a consultation about the draft RTS on risk-mit- igation techniques for OTC-derivative contracts not cleared by a CCP. The draft RTS outlines the required risk manage- ment procedures for the exchange of collateral (art. 11(3) of EMIR), the models and the framework used for it. Additionally the draft sets some minimum require- ments for the documentation of those risk man- agement procedures. What’s next? The consultation runs until 14 July 2014. After that date, ESMA, EBA and EIOPA will finalise their jointly developed draft RTS and submit them to the Commission before the end of 2014.

« 3 April – EuroCCP – NL « 8 April – KDPW_CCP

YOU CAN FIND THE LINK TO THE CONSULTATION HERE.

« 11 April - Eurex Clearing AG There are now four CCPs authorised under EMIR.

Scanning - June 2014 - page 3