CME Clearing Europe (CMCE) yesterday received authorisation as a CCP under EMIR. CMCE is a London-based, FCA-supervised derivatives exchange- a wholly-owned subsidiary of the CME group, offering a broad range of products including: IRS, energy and commodities and FX contracts. CMCE is currently the only clearing house to offer the option of an individual client […]

ESMA has published the EC’s response to its own letter of 8 May regarding the frontloading requirement for OTC derivatives under EMIR. Michel Barnier’s letter makes the EC’s position uncharacteristically clear- hurry up and adjust the maturity threshold. The frontloading obligation requires the clearing of outstanding swaps. Cleared and uncleared swaps have widely different capital […]

The always-quotable CFTC Commissioner Scott O’Malia took a leaf from Hippocrates in a recent speech subtitled “Regulators must first do no harm”. His prescriptions for the contagions of market fragmentation, fractured liquidity and parasitical arbitrage, all consequent upon regulatory divergence, are as follows: The Cure Should Not Be Worse than the Disease: Fixing Unworkable Rules. […]

On 4 July 2014, EBA published the final draft RTS on the clearing members’ exposure to clients. The RTS addresses the minimum margin periods of risk (MPOR) that financial institutions acting as clearing members may use as input for the calculation of their capital requirements for exposure to clients. MPOR reflects the time period from […]

Regulators from the US and EU met on 8 July to host a meeting of the Financial Markets Regulatory Dialogue. Each side brought an alphabet of agencies, subjects covered included key G20 reforms: Basel II capital\leverage\liquidity rules, respective implementation of derivatives reforms, and resolution planning[1]. Derivatives– a mutual pledge to provide greater certainty regarding trading, […]

ESMA has launched two consultation papers examining the clearing obligation for IRS[1] and CDS[2]. Following the authorisation of six CCP’s[3], ESMA has grouped the consultation process into broad asset classes, each of which are assessed for their contribution to systemic risk and a consequent clearing mandate. IRS:        The RTS proposes the following four classes […]

ESMA has launched the first round of consultations in preparation for OTC derivative central clearing. Triggered by the authorisation of the first six CCP’s, each defining a new timeline per unique asset class; ESMA has released different consultation papers for IRS and CDS. Feedback will contribute to the final RTSs submitted to the EC in […]

On 4 July 2014, Keler CCP received the authorisation from the Central Bank of Hungary (MNB) to act as a CCP under EMIR.  Keler CCP is the ninth to be authorised, which leaves 13 outstanding applications in the pipeline. Keler CCP is authorised to clear the following classes of financial instruments: MiFID financial instruments / […]

On 30 June 2014, the FCA shared the reporting advice it had been providing to Authorised firms who are also Clearing Members of an authorised or recognised CCP under EMIR. The FCA adopts a proactive approach by advising these firms that under EMIR, the CCPs need to be made aware of the following for reporting purposes: […]