ESMA has published its final report on suggested draft technical standards under the Regulation on OTC Derivatives, Central Counterparties (CCP) and Trade  (TR) (EMIR). It has submitted the report to the Commission, which now has three months within which to decide whether to adopt the standards ESMA proposes. The technical standards cover:

  • OTC derivatives: the standards cover the clearing obligation, the clearing obligation procedure, the public register, access to a trading venue, non-financial counterparties and risk mitigation for OTC derivatives not cleared by a CCP;
  • CCPs: the standards cover colleges, recognition of CCPs and requirements on them including organisational requirements, record keeping and business continuity. They also cover margins, the default fund, liquidity risk control, the default waterfall, collateral requirements, investment policy and review of models, stress testing and back testing; and
  • TRs: the standards cover the reporting obligation, applications for registration and transparency and data availability.

ESMA also needs to issue further guidelines and technical standards on:

  • CCP interoperability;
  • contracts with a direct substantial or foreseeable effect in the EU or where it is necessary or appropriate to prevent evasion of any EMIR provision; and
  • risk mitigation techniques for OTC derivatives that are not cleared by a CCP (joint standards with EBA).

(Source: ESMA publishes EMIR Technical Standards)