As previewed by its own ECON committee, the European Parliament yesterday adopted the “final” draft of the long-awaited non-cleared margin rules under EMIR. The uncharacteristic fast-tracking has created the ironic situation in which market participants are now lobbying the Council to delay their adoption of the rules in order to avoid entry into application during the year-end code freeze.
The Council is not subject to the formal process that applies to the Parliament so has the ability to postpone implementation beyond the IT interlude. Given the less than stellar start to Phase 1 in the US, imposing an EU start date close to year-end would be akin to choosing the stormiest day of the year for your first tightrope walk. However, bureaucratic and opaque political imperatives often prove to have more force than mere rationality.