Derivatives were brought to the forefront of regulatory concerns at the Commission as the financial crisis developed, from the near-collapse of Bear Stearns to the default of Lehman’s and the bail-out of AIG. In October 2009, the Commission published a Communication outlining the range of legislative measures that it has now published as a draft regulation. On 15 September 2010 the Commission issued its formal Proposal for a Regulation on OTC Derivatives, central counterparties and trade repositories.
The Hungarian Presidency produced a further compromise text at the end of May 2011. This includes the following points:
- the scope of the Regulations still remains unconfirmed;
- in terms of intra-group exemptions the counterparty must be part of the same group provided the counterparty is established in the EU or in a third country jurisdiction which provides for equivalent obligations, subject to a certain number of conditions;
- reference is made to the drafting of implementing standards by ESMA—these have still to be agreed; and
- much of the UK/German wording from the previous compromise in relation to third countries has now been incorporated into the current text.
The Hungarian Presidency has also published a further text of its compromise proposal dated 6 June 2011 on EMIR in advance of a meeting of the Committee of Permanent Representatives (COREPER) on 8 June 2011. It follows earlier compromise proposals previously published by this Presidency.
The vote on EMIR in the European Parliament plenary is now scheduled to take place during the July session. Indications are that this will be a first reading unless agreement can be reached between Parliament and Council. If the measure goes to a second reading this could potentially extend the timetable by a further six months.