ESMA publishes final report on FRANDT clearing services
03 June 2020 Brussels
Image: mpaniti/Shutterstock
The European Securities and Markets Authority (ESMA) has published its final report on the fair, reasonable, non-discriminatory and transparent (FRANDT) commercial terms for the provision of clearing services.
The FRANDT requirements start to apply on 18 July 2021 in accordance with Article 2(c) of the European market infrastructure regulation (EMIR) Refit.
ESMA’s technical advice details how to specify the conditions under which the commercial terms for the provision of clearing services are to be considered FRANDT.
The association said its technical advice takes into account the feedback received and aims to strike a balance between improving clearing client’s access to clearing services and ensuring such services are provided on FRANDT compliant terms.
It aims to do this while ensuring the requirements are proportionate and within the mandate received.
ESMA also explained that the requirements have been carefully designed to address clearing clients and clearing service providers’ concerns and aims to facilitate comparability of the information disclosed and address the process of onboarding clearing clients.
Additionally, the requirements also aim to standardise the information disclosed to clients bilaterally and encourage further standardisation of contractual terms.
Meanwhile, ESMA also noted that as part of a broader effort to facilitate access to clearing, the
European Market Infrastructure Regulation (EMIR) review has introduced the requirement for clearing members and clients who provide clearing services to do so under FRANDT terms by June 2021.
The EC is mandated to develop a delegated act to define the requirements for such FRANDT terms and tasked ESMA in June 2019 with producing technical advice on the FRANDT terms as input for the development of the delegated act.
The final report on the technical advice has been sent to the EC. To read the full report, please
click here.
The FRANDT requirements start to apply on 18 July 2021 in accordance with Article 2(c) of the European market infrastructure regulation (EMIR) Refit.
ESMA’s technical advice details how to specify the conditions under which the commercial terms for the provision of clearing services are to be considered FRANDT.
The association said its technical advice takes into account the feedback received and aims to strike a balance between improving clearing client’s access to clearing services and ensuring such services are provided on FRANDT compliant terms.
It aims to do this while ensuring the requirements are proportionate and within the mandate received.
ESMA also explained that the requirements have been carefully designed to address clearing clients and clearing service providers’ concerns and aims to facilitate comparability of the information disclosed and address the process of onboarding clearing clients.
Additionally, the requirements also aim to standardise the information disclosed to clients bilaterally and encourage further standardisation of contractual terms.
Meanwhile, ESMA also noted that as part of a broader effort to facilitate access to clearing, the
European Market Infrastructure Regulation (EMIR) review has introduced the requirement for clearing members and clients who provide clearing services to do so under FRANDT terms by June 2021.
The EC is mandated to develop a delegated act to define the requirements for such FRANDT terms and tasked ESMA in June 2019 with producing technical advice on the FRANDT terms as input for the development of the delegated act.
The final report on the technical advice has been sent to the EC. To read the full report, please
click here.
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