On 5 June 2013, the European Securities and Markets Authority (“ESMA”) published a report entitled “Guidelines and Recommendations regarding written agreements between members of CCP colleges”. Article 18 of EMIR states that: A National Competent Authority (“NCA”) must establish a CCP college within 30 days of receiving a complete application for authorisation as a CCP […]

Risk Magazine is reporting that transactions cleared voluntarily will continue to benefit for hedge accounting rules under International Accounting Standards Board (IASB) proposals. As discussed previously in this blog post, in its February 2013 exposure draft entitled “Novation of Derivatives and Continuation of Hedge Accounting”, the IASB had proposed that hedge accounting would be lost […]

This is a link to an article in risk magazine regarding CCP recovery planning, and specifically loss allocation rules. The article highlights differing views within the market regarding the extent to which loss-allocation rules within a recovery (but not necessarily a resolution) scenario should be flexible or prescriptive in nature.  The article points to a […]

Reuters is reporting that regulators have postponed the deadline for harmonising supervision of derivatives markets.  The G20 had originally pledged to have regulation in place by the end of 2012.  However, an aspirational goal of September 2013, timed to coincide with the G20 Summit in Russia, has now been agreed so as to allow regulators […]

Introduction On 16 May 2013, the EU Commission published a memo on the implementation of the framework under Article 25 of EMIR for recognising CCPs that are established outside of the EU (“Non-EU CCPs”) and which wish to provide services to market participants that are established within the EU. The Commission suggests that, in practice, […]

Risk Magazine has confirmed that Hong Kong Exchanges and Clearing (HKEx) has announced that it will delay mandatory over-the-counter clearing expected in October 2013 until January 2014.  This timetable change comes amid growing concerns in Hong Kong and elsewhere about the cross-border application of derivative regulations and issues surrounding the recognition of foreign central counterparties.  […]

Introduction Here is a link to an interesting article in Risk Magazine dealing with the issue of segregation under EMIR. Article 39 of EMIR (“Segregation and Porting”) requires a central counterparty (“CCP”) to keep separate records and accounts that will enable it to distinguish the assets and positions of: one clearing member (“CM”) from those […]

This is a link to an interesting paper published by the Bank of England relating to CCP loss allocation rules (first spotted over on The OTC Space).  The paper explains the reasons why CCPs must maintain a matched book at all times and the process typically followed on the occurrence of a clearing member default.  […]

This is a link to a Risk article highlighting concerns within the market regarding the possibility that transactions cleared voluntarily would cease to benefit from hedge accounting rules under International Accounting Standards Board (IASB) proposals. The article explains that, to benefit from hedge accounting treatment and so avoid the need to be marked-to-market, a derivative […]