On June 29, the European Commission adopted a delegated regulation (Regulation) under the Markets in Financial Instruments Regulation (MiFIR) in relation to “straight-through processing”—i.e., the obligation to clear derivatives traded on regulated markets and the timing of acceptance for clearing.
Under MiFIR, trading venues, central counterparties (CCPs) and clearing members are required to have systems, procedures and arrangements in place to ensure derivatives are cleared as quickly as technologically practicable. The Regulations further specify requirements for trading venues and CCPs to achieve timely clearing, which include: (1) arrangements to facilitate the transfer of information; (2) pre-trade checks for cleared derivatives concluded on trading venues; (3) timeframes for transferring information for cleared derivatives concluded on trading venues and bilaterally; and (4) the treatment of cleared derivatives not accepted for clearing. For exchange-traded derivatives, those requirements will not apply, provided the relevant contractual arrangements offer certainty of clearing.
As mentioned in previous updates, the European Council and European Parliament will consider the Regulation and, once formally approved, the Regulation will go into effect 20 days following its publication in the Official Journal of the European Union.
For more information, see the Corporate & Financial Weekly Digest editions of June 17, June 10, May 27, May 20, April 29 and April 15.
A copy of the Regulation can be found here.