Sun. Sep 27th, 2020

Planet Compliance

Innovation & Regulation in Finance

EMIR: ESMA proposes one-day margin period of risk for CCP client accounts

2 min read

The European Securities and Markets Authority (ESMA) has today sent its amended regulatory technical standards (RTS) under the European Market Infrastructure Regulation (EMIR) for endorsement to the European Commission. The RTS detail the margin period of risk (MPOR) for CCP client accounts, e.g. the amount of initial margins collected by a CCP. The amended RTS would allow EU-based CCPs to margin on a one-day MPOR basis.

The amended draft RTS reduces from two-day to one-day the MPOR for gross omnibus accounts and individual segregated accounts for exchange traded derivatives and securities. Following the US equivalence decision by the European Commission, the amended RTS would provide a level playing field between European and US CCPs of one-day MPOR. The client account structures together with the conditions that they need to respect for the CCPs to margin on a one-day MPOR basis ensure a sufficient level of protection to the CCPs and a greater protection for clients.

The ESMA statement and the amended RTS can be found here.

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