ESMA has written to the Agriculture Committee of the US House of Representatives, setting out its views on successful international reform of the global OTC derivatives markets. It notes several conflicting and duplicative requirements in current and planned legislation which stand in the way of reform:

  • different applications of the clearing obligation;
  • different bilateral margin requirements;
  • privacy and data protection constraints;
  • different scope and exemptions (non-financial counterparties, inter-affiliates, pension funds, small banks, etc.);
  • different requirements for CCPs and trade repositories; and
  • indemnification requirements in the US.

It also outlined its concerns over the position of foreign swap dealers who may be required to register in the US without knowing the extent of the rules that will apply to them. (Source: ESMA Writes to US on OTC Derivatives)