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Bailey’s freshest tips for the Brexit Break-Up

Earlier this week, the Chief Executive of the FCA, Andrew Bailey provided us with a recent update about the current state of affairs regarding Brexit. As is fast becoming the norm in Bailey’s Brexit updates, he opened his speech with the progress that has been made thus far; the Temporary Transitional Power regime; the signing […]

MiFIR packaged trades all wrapped up

ESMA has published an opinion on the treatment of packaged trades under MiFIR’s Article 32 trading obligation. Article 28 mandates that derivatives subject to the trading obligation (TO) are traded regulated markets, OTFs, MTFs or third country equivalents. There has been widespread concern with regard to packaged trades, the elements of which are best traded […]

US to EU- the honeymoon is over

Although prefaced by the usual caveat that “the views contained in this speech are my own and do not represent the views of the CFTC”, Commissioner Brian Quintenz delivered the keynote address yesterday at the FIA Annual Meeting, eviscerating the EU’s plans to revise EMIR in respect of CCP oversight. The short speech is well-worth reading in full, […]

Building Societies cleared to clear

The UK Government has amended the Building Societies Act to allow the societies and their subsidiaries to become clearing members. EMIR’s Category 4 clearing obligation will apply from 21 December 2018, comprising all 44 of the UK’s building societies, mandating the central clearing of prescribed derivatives. The amendment is made to section 9A (1)(c) of […]

EMIR clearing mandate expands beyond G4

The EC has today published an RTS and accompanying annex adding three more currencies to the EMIR IRS clearing mandate. The RTS specifies obligations for fixed-to-float interest rate swaps and FRA’s in: Swedish Krona, Polish Zloty and Norwegian Krone. It delineates phase-in periods conforming to the existing clearing counterparty classifica tion: Category 1 (clearing members)- […]

EC adopts US CCP equivalence

The only recently-acknowledged elephant of EU-US CCP lack of equivalence is one step closer to leaving the room. The European Commission has today granted the CFTC status as an equivalent regulatory regime for CCPs. The determination will be effected by a legally-binding implementing act in accordance with Article 25(6) EMIR. The decision follows the 10 […]

Irresistible appeal of CCP portfolio margining

On 25 February 2016, the CFTC requested public comments on the petition of LCH.Clearnet Limited (“LCH”) to introduce portfolio margining across certain exchange-traded interest rate futures and OTC interest rate swaps. Economically-correlated interest rate futures would be pooled with OTC rate swaps for margining purposes, resulting in reduced collateral requirements for clearing members, and ultimately, […]

EMIR CDS Clearing clearer

The EC yesterday adopted a Delegated Regulation implementing mandatory clearing for certain CDS. Under the Regulation, the obligation will apply to the four clearing categories as follows: Category 1- 9 months after the entry into force of the RTS Category 2- 15 months after the entry into force of the RTS Category 3- 21 months […]

Indirect Clearing: In Search of One Template To Rule Them All

Background EMIR introduced a clearing obligation in relation to “OTC derivative contracts” of any class that has been declared subject to a clearing obligation and which are transacted between particular types of counterparty[1].  MiFIR[2] extended the scope of the clearing obligation to all derivative transactions concluded on a regulated market.  There are three basic ways […]

EMIR clearing bell tolls louder

The review period for EMIR’s RTS expired this weekend without murmur from the Parliament or the Council, both bodies had publicly stated that they would be making no objection. The end of the scrutiny period sends the RTS for publication on the Official Journal, marking a 20-day countdown for entry into force, the OJ is […]

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