ESMA has issued a feedback statement on the central clearing of non-deliverable forwards. This is a feedback statement on the consultation on the clearing obligation for NDFs. ESMA is not proposing a clearing obligation on NDFs based on feedback received.
The European Securities and Markets Authority (ESMA) today published a feedback statement on its consultation on the clearing obligation for non-deliverable forwards (NDF) which it had to conduct under the European Markets Infrastructure Regulation (EMIR).
EMIR requires ESMA to draft technical standards regarding the clearing obligation of different derivative classes. This feedback statement summarises the responses received to the consultation.
Based on the feedback received, ESMA is not proposing a clearing obligation on the NDF classes at this stage. ESMA believes that more time is needed to appropriately address the main concerns raised during the consultation.
This decision is without prejudice to the possibility for ESMA to propose a clearing obligation on the NDF classes (by the submission of a final report to the European Commission including a draft RTS) at a later point in time in order to take into account further market developments.
Pension funds to benefit from a further two year exemption from central clearing requirements
The European Commission has today published a report that recommends granting pension funds a two-year exemption from central clearing requirements for their over-the-counter (OTC) derivative transactions. The report, which is based on an extensive study requested by the European Commission, concludes that central counterparties (CCPs) need this time to find solutions for pension funds. At the same time, the report encourages CCPs to continue working on finding technical solutions in this important matter. Ultimately, the objective is that pension scheme arrangements (PSAs) should use central clearing for their derivatives transactions, as is the case for other financial institutions. This is also imperative for financial stability. Under current arrangements, PSAs – which encompass all categories of pension funds – would have to source cash for central clearing. Given that PSAs hold neither significant amounts of cash nor highly liquid assets, imposing such a requirement on them would require very far-reaching and costly changes to their business model which could ultimately affect pensioners’ income. Current EU law provides for a temporary exemption from the clearing obligation until August 2015.
Source
http://ec.europa.eu/finance/financial-markets/derivatives/index_en.htm#150203
OTCWIRE 