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EU Parliament Rejects EMIR Regulatory Technical Standards

The FT reports that the Economic and Monetary Affairs Committee (ECON) of the EU Parliament yesterday voted 24-20 to reject some of the Regulatory Technical Standards (RTS) drafted by the European Securities and Markets Authority (ESMA) under EMIR.

Broadly speaking, concerns are thought to relate to two aspects of the RTS:

  • the fact that the clearing threshold is defined by reference to “gross notional” values of OTC derivatives, whereas EMIR itself requires systemic relevance to be determined by reference to “net positions”; and
  • the additional requirements within the RTS (and not detailed within EMIR itself) which apply before bank guarantees can be considered eligible collateral for CCPs.

The ECON vote is due to be ratified on Thursday by the full EU Parliament.  However, under EMIR, the EU Parliament is not able to amend an RTS, but rather only to approve, or reject, it in full.  A rejection seems the likely outcome and would result in significant delay to the introduction of EMIR within the EU.

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