EU swap clearing rules set for June 2016 07 December 2015Paris Reporter: Stephanie Palmer
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Swap clearing obligations for OTC derivatives in the European Union will come in to force on 21 June 2016, the European Securities and Markets Authority (ESMA) has announced.
The clearing obligation is part of the European Market Infrastructure Regulation (EMIR), the post-crisis derivatives regulation aiming to reduce systemic risk in the financial system. This follows the G20 commitment to clear certain OTC derivatives through central counterparties (CCPs).
The announcement follows the publication of the obligation’s technical standards in the office journal on 1 December. The obligations will cover fixed-to-float interest rate swaps, float-to-float swaps, forward rate agreements and overnight index swaps denominated in euros, British pounds, Japanese yen and US dollars.
ESMA will assess whether the clearing obligation should apply, one the relevant national competent authority has approved a CCP for clearing a particular class of OTC derivatives.
The classes of OTC derivatives covered by the obligation, and the CCPs authorised to clear them, will be available on ESMA’s public register.
Now, the authority will turn its attention to index credit default swaps and interest rate swaps denominated in the Norwegian krone, Swedish krona and Polish z?oty. Draft regulatory technical standards for these have been submitted to the commission.
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