ESMA Regulation - Consultation Paper - Draft Technical Standards for the Regulation on OTC Derivatives, CCPs and Trade Repositories - June 25, 2012

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Timeline - European Market Infrastructure Regulation
Proposal Date EC Approval Effective Date
September 15, 2010 December 19, 2012 March 15, 2013

On June 25, 2012 The European Securities and Markets Authority (ESMA), published its Draft Technical Standards for the Regulation on OTC Derivatives, CCPs and Trade Repositories, also known as the European Market Infrastructure Regulation, or "EMIR." <ref>ESMA proposes rules on derivatives, central counterparties and trade repositories. ESMA. Retrieved on September 18, 2012.</ref> EMIR introduces new methods to improve transparency and decreased risks associated with the OTC derivatives market while creating common rules for CCPs and for TRs. This consultation paper provides an overview of the draft regulatory technical standards (RTS) and implementing technical standards (ITS) which ESMA plans to adopt by December 2012.

Note: ESMA issued its Final Report on EMIR technical standards on September 27, 2012.


On September 15, 2010, the European Commission published its final proposal for EMIR, which sets out to increase stability within OTC derivative markets by introducing:

  • a reporting obligation for OTC derivatives;
  • a clearing obligation for eligible OTC derivatives;
  • measures to reduce counterparty credit risk and operational risk for bilaterally cleared OTC derivatives;
  • common rules for central counterparties (CCPs) and for trade repositories; and 
  • rules on the establishment of interoperability between CCPs. <ref>European Market Infrastructure Regulation (EMIR). Financial Services Authority. Retrieved on September 18, 2012.</ref>

On February 9, 2012, the European Parliament, the Council and the European Commission reached a political agreement on the Regulation of the European Parliament and the Council on OTC derivative transactions, central counterparties (CCPs) and trade repositories (TRs). This became known as the European Market Infrastructures Regulation (EMIR), or "the Regulation". On July 4, 2012 the European Commission adopted EMIR, and set the effective date as August 16, 2012.

Summary of the Draft Technical Standards[edit]

The 293 page document consists of the rationale and justification for the standards, consisting largely of responses to the earlier discussion paper, followed by seven Annexes. Annex 1 contains excerpts from the EMIR text, which required ESMA to create the standards. Annexes 2-6 contained the actual technical standards (see below). Annex 7 is a cost-benefit analysis of the standards.

  • Annex 2, Draft regulatory technical standards on OTC derivatives:
  • Annex 3, Draft regulatory technical standards on Central Counterparty (CCP) requirements:
  • Annex 4, Draft implementing technical standards on record keeping requirements for CCPs:
  • Annex 5, Draft regulatory technical standards on trade repositories:
  • Annex 6, Draft implementing technical standards on trade repositories:

One important aspect for the drafting of technical standards is the analysis of the cost and benefits of the proposed measures. This paper provides an impact assessment but due to the limited amount of information available, ESMA was unable to perform an in-depth quantitative cost-benefit analysis. ESMA invites respondents to this paper to "accompany their responses with quantitative evidence supporting their arguments" in order to assist them in developing a thorough cost-benefit analysis.

ESMA accepted comments on the consultation paper until August 5, 2012. Comments can be viewed HERE.


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