The Securities and Markets Stakeholder Group (SMSG) has provided advice to ESMA on its proposed draft regulatory technical standards (TS) for EMIR (the Regulation on OTC derivatives, central counterparties (CCPs) and trade repositories). It notes concerns about ESMA’s decision to deviate in several respects from the approach taken by the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) in their principles for financial market infrastructures. It says lack of convergence with international standards will increase the cost of clearing in Europe and hinder mutual recognition of third country CCPs. But this cannot be overcome by ESMA not conducting an individual assessment of third country CCPs’ compliance with EMIR, as proposed. This would harm investors, who would not be able to rely on important aspects of EMIR such as client funds segregation. SMSG also warns that some technical standards are too narrowly defined and this could impact on innovation. Its advice is for ESMA to be consistent with CPSS-IOSCO principles. (Source: SMSG Advice on EMIR Draft (Regulatory) Technical Standards)