On 11 July 2014, the European Securities and Markets Authority (ESMA) published two consultation papers on draft regulatory technical standards (RTS) for the clearing of interest rate swaps (IRS) and credit default swaps (CDS) under Regulation 648/2012 on OTC derivative transactions, central counterparties and trade repositories (EMIR).

ESMA has determined that some IRS and CDS classes should be subject to the EMIR clearing obligation.

For IRS, the draft RTS propose the following four classes, on a range of currencies and underlying indices, should be subject to central clearing:

  • Basis swaps;
  • Fixed-to-float interest rate swaps;
  • Forward rate agreements; and
  • Overnight index swaps.

For CDS, the draft RTS propose that European untranched index CDS (for two indices) should be subject to central clearing.

The IRS consultation paper is open for feedback until 18 August 2014 and the CDS consultation paper until 18 September 2014.