ESMA has published a Discussion Paper to help it prepare the RTS it needs to complete under EMIR. The paper outlines ESMA’s approach in determining:

  • the characteristics of OTC derivative classes that should be subject to the clearing obligation;
  • the date(s) from which the clearing obligation takes effect, including any phase-in and the categories of counterparties to which the obligation applies; and
  • the minimum remaining maturity of the OTC derivative contracts referred to under EMIR.

ESMA also looks at how close various derivative asset classes are to being "ready" in terms of the criteria that ESMA will take into account when defining the classes for central clearing. It looks at:

  • the standardisation, volume and liquidity of relevant classes of OTC derivatives;
  • the availability of data related to OTC derivative markets; and
  • the experience in clearing and the international regulatory framework.

Currently,13 CCPs provide OTC clearing for five asset classes within the EU - interest rate derivatives, credit derivatives, equity derivatives, forex and commodity derivatives. No CCPs are yet authorised under EMIR, and ESMA will only start to define relevant classes once a CCP is authorised under EMIR, or recognised if outside the EU. ESMA needs comments by 12 September. (Source: ESMA Consults on Clearing)