ESMA Regulation - Discussion Paper - Draft Regulatory Technical Standards on risk mitigation techniques for OTC derivatives not cleared by a CCP under the Regulation on OTC derivatives, CCPs and Trade Repositories - March 6, 2012

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This is a joint discussion paper published by EBA, ESMA and EIOPA (the ESAs) and expresses the ESAs preliminary views on draft regulatory technical standards.


After the European Commission set forth legislative proposals for a Regulation on over-the-counter (OTC) derivatives, central counterparties (CCPs) and trade repositories (the Regulation) on September 15, 2010, a political agreement was reached by the EC, the European Parliament and the Council of the EU, during their "Trilogue" meeting of February 9, 2012. This discussion paper is based on that political agreement and is meant to allow the ESAs to prepare their work on developing the RTS more efficiently.

The first section of the discussion paper focuses on preliminary considerations regarding collateral (margin) and capital requirements. The second section outlines potential options regarding combinations of collateral and capital requirements. The third and fourth sections discuss the application of variation and initial margins. The fifth and sixth sections focus on identifying eligible collateral and collateral valuation. The seventh section highlights potential issues related to transactions with counterparties outside of the EU. The eighth and ninth sections elaborate on risk management procedures, operational processes for the exchange of collateral and minimum transfer amounts as well as intra-group exemptions. The last section provides a data request for the cost-benefit analysis.


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