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IOSCO Raises Further Concerns to Regulators on EMIR CCP

On 22 November 2013, the Asia-Pacific Regional Committee of the International Organization of Securities Commissions (IOSCO) published another letter to European Commissioner Michel Barnier expressing concern about the recognition process for Asia-Pacific Central Counterparties (CCPs) under the European Markets Infrastructure Regulation (EMIR).  IOSCO reiterated the previous points made in their 6 June 2013 letter on the importance of the recognition status of the Asia Pacific CCPs under EMIR and received feedback from members that further guidance would be useful on the process of non-EU CCP recognition.  This included:

  • Detailed information on the contents, effect and purpose of the memorandum of understanding (MoU) with the European Securities and Markets Authority (ESMA), including requirements from the home regulators, and the procedures for finalising the MoU; and
  • The approach to equivalence assessments for jurisdictions that are not currently covered by reports of technical advice on third country regulatory equivalence under EMIR published by ESMA.

IOSCO highlighted further concerns on the interaction of non-EU CCP equivalence assessments with the Capital Requirements Directive (CRD IV).  The deadline by which CRD IV provides interim relief for non-EU CCPs is 15 June 2014.  If due process for the non-EU CCP equivalence assessment is not completed by the deadline, there is a risk that non-EU CCPs will not be qualified as CCPs for the purposes of CRD IV.  In this case, the European Commission is urged to exercise its discretion to adopt an implementing act to extend relief by a further six months to 15 December 2014.

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