ESMA unveils draft RTS on changes to CCPs’ activities and models
08 April 2021 France
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The European Securities and Markets Authority (ESMA) has published its final report containing draft regulatory technical standards (RTS) relating to changes to central counterparty (CCP) services and activities as well as models and parameters under EMIR.
The European Markets Infrastructure Regulation (EMIR) requires a CCP wishing to extend its business to additional services or activities that are not covered by the initial authorisation, to submit a request for extension of authorisation to its competent authority (Article 15).
Prior to making any significant change to its risk models or parameters, ESMA explains that a CCP must also obtain validation from its competent authority and ESMA (Article 49).
The draft RTS specifies the conditions under which additional services or activities to which a CCP wishes to extend its business are not covered by the initial authorisation and therefore require an extension of authorisation.
In addition, the conditions under which changes to the CCPs’ models and parameters are significant and therefore require a validation; and the procedures for consulting the CCP college on whether those conditions are met, are both specified.
The European System of Central Banks, the European Banking Authority and other relevant authorities have contributed to the drafting of the RTS.
ESMA will submit the draft RTS to the European Commission for endorsement, following which the Commission Delegated Regulation will be subject to the non-objection of the European Parliament and the Council.
The European Association of CCP Clearing Houses recently called for a robust and efficient approach to approve CCP products, services and risk models in response to ESMA’S consultation on the European Market Infrastructure Regulation (EMIR) article 15 and article 49.
The European Markets Infrastructure Regulation (EMIR) requires a CCP wishing to extend its business to additional services or activities that are not covered by the initial authorisation, to submit a request for extension of authorisation to its competent authority (Article 15).
Prior to making any significant change to its risk models or parameters, ESMA explains that a CCP must also obtain validation from its competent authority and ESMA (Article 49).
The draft RTS specifies the conditions under which additional services or activities to which a CCP wishes to extend its business are not covered by the initial authorisation and therefore require an extension of authorisation.
In addition, the conditions under which changes to the CCPs’ models and parameters are significant and therefore require a validation; and the procedures for consulting the CCP college on whether those conditions are met, are both specified.
The European System of Central Banks, the European Banking Authority and other relevant authorities have contributed to the drafting of the RTS.
ESMA will submit the draft RTS to the European Commission for endorsement, following which the Commission Delegated Regulation will be subject to the non-objection of the European Parliament and the Council.
The European Association of CCP Clearing Houses recently called for a robust and efficient approach to approve CCP products, services and risk models in response to ESMA’S consultation on the European Market Infrastructure Regulation (EMIR) article 15 and article 49.
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