FMLC responds on EMIR clearing: FMLC has responded to ESMA's consultation on the clearing obligation under EMIR (number 3). The response sets out its concerns on:

  • lack of harmonisation in the non-deliverable forward (NDF) clearing obligation between the EU and other jurisdictions, notably the US. It says there is no standardisation in the market, which it notes could lead to fragmentation where clearing is not required outside the EU at the same time as it is in the EU;
  • when the proposed frontloading obligation will apply, given the inability to know in advance when it will take effect. Also, it notes it may not be possible for some counterparties to clear their trades within the required period; 
  • ESMA's proposal to include longer term maturities, which it says may lead to uncertainty because of the limited liquidity in those maturities; and
  • the risks of market concentration where only one central counterparty (CCP) is offering to clear FX NDFs.

(Source: FMLC Responds to ESMA on NDF Clearing

FMLC to contribute to market review: FMLC has announced that it will be contributing to the Fair and Effective Markets Review on the fixed income, foreign exchange and commodities markets. FMLC has identified legal barriers, specifically regarding data sharing, which it believes may significantly hinder the effectiveness of cross-border regulation. FMLC goes on to outline three specific issues arising from the Commission's proposed Regulation and Directive on the protection of individuals with regard to the processing of personal data and on free movement of such data. FMLC has expressed its concerns in a letter to the Commission and published a paper identifying further legal uncertainties which might arise from the Commission's proposals. (Source: Letter Responding to the Fair and Effective Markets Review)

FMLC publishes loss absorbing capacity paper: FMLC has published a paper examining issues of legal uncertainty arising from the Financial Stability Board (FSB) proposal for an international standard on total loss absorbing capacity of global systemically important banks. The paper identifies a number of inconsistencies between the approaches adopted by the FSB and other EU institutions as well as instances where the FSB's proposals lack clarity. (Source: Paper Discussing FSB Loss Absorbing Capacity Proposals)