ESMA asks Commission to delay central clearing for small financial counterparties

The European Securities and Markets Authority (ESMA) has published today its final report regarding the amended application of the clearing obligation that financial counterparties with a limited volume of activity in OTC derivatives need to comply with under the European Market Infrastructure Regulation (EMIR).

Due to a range of reasons covered in the report, in particular relevant EU legislations being under review or finalisation, ESMA proposes to postpone the phase-in period for central clearing of OTC derivatives applicable to financial counterparties with a limited volume of derivatives activity.

ESMA’s report proposes to amend EMIR’s Delegated Regulations on the clearing obligation in order to prolong, by two years, the phase-in for financial counterparties with a limited volume of derivatives activity – those ones classified in Category 3 under EMIR Delegated Regulations. ESMA is also proposing to align the three compliance dates for Category 3 firms in the Delegated Regulations regarding Interest Rate Swaps and Credit Default Swaps. The newly proposed compliance date would be 21 June 2019.

ESMA’s final report was submitted to the European Commission for endorsement of the draft RTS presented in the Annex. From the date of submission, the European Commission should decide within three months whether or not to endorse the RTS.

The ESMA statement and related information can be found here.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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