European Securities and Markets Authority

Interest Rate Swaps Clearing Obligation

On January 29th, the European Securities and Markets Authority (“ESMA”) published an opinion on the draft Regulatory Technical Standards on the Clearing Obligation on Interest Rate Swaps. While the opinion generally supports the European Commission’s amendments, it raises some concerns on the process for exempting non­ EU intragroup transactions from the clearing obligation.

Authorized CCPs

On January 22nd, ESMA added the Athens Exchange Clearing House to its list of authorized central counterparties and on January 9th, reauthorized CME Clearing Europe for extended CCP activities and services.


On January 9th, ESMA published updated guidance in the form of frequently asked questions and answers. Document 2015/11 addresses the application of the Alternative Investment Fund Managers Directive. Document 2015/12 discusses the guidelines on exchange­traded funds and other Undertakings for Collective Investment in Transferable Securities issues.

European Banking Authority

Bank Recovery and Resolution Directive

On January 30th, the European Banking Authority (“EBA”) made available on its interactive website the EBA's Technical Standards and Guidelines associated with the Bank Recovery and Resolution Directive (“BRRD”). Using the interactive tool, users can submit questions on the application of the BRRD. EBA Press Release.

Valuation Adjustments.

On January 23rd, the EBA amended its final draft Regulatory Technical Standards on Prudent Valuation to replace the term “volatility” in Article 9 and Article 10 of the final draft Regulatory Technical Standards with the term “variance” for the purposes of computing market price uncertainty and close­out costs additional valuation adjustments. The amendment affects only institutions using the Core approach and results in a slight relaxation of the calibration of the volatility test performed under these two articles.

Resolution Planning Proposals

On January 14th, the EBA opened a consultation on draft Implementing Technical Standards for resolution planning procedures, forms, and templates. The forms and templates cover the minimum required information on institutions' organizational structure, governance and management, critical functions and core business lines, critical counterparties, structure of liabilities, funding sources, off­balance sheet, payment systems, information systems, interconnectedness, authorities, and legal framework. Comments should be submitted on or before April 14th, 2015. EBA Press Release.

European Central Bank

Regulatory Role

On January 30th, Reuters summarized the comments of Andreas Dombret, an executive board member of Germany’s Bundesbank, concerning the European Central Bank (“ECB”)’s role and the coordination of the ECB’s supervision with that of national regulators. Dombret commented on the speed with which the system had been created and stated that “[people] should not expect everything to run smoothly from day one… [as it will] take some time before every detail is worked out.” Comments.

Survey of Credit Terms and Conditions

On January 23rd, the ECB published the results of its December 2014 survey of credit terms and conditions in euro­denominated securities financing and over­the­counter derivatives. The survey found only limited changes in credit terms for most counterparty types, a decrease in overall market­making activities by large banks, and a growing role for non­bank financial institutions. ECB Press Release.

European Commission

Capital Markets Union

On January 28th, the European Commission opened its project to create a Capital Markets Union (“CMU”) for all 28 Member States by removing barriers to cross­border investment and lowering costs of funding within the EU. A key objective of the CMU will be to diversify and extend sources of funding so that businesses have easier access to credit through capital markets as well as banks. EC Press Release.

Spanning the Derivatives Divide

On January 27th, Reuters recounted the comments of Olivier Guersent, European Commission Deputy Director­ General, concerning the cross­border application of derivatives trading rules. Discussions between the U.S. and E.U. are progressing and an agreement could be reached soon. Building Bridges.