Co-authored by Tim Aron.

On December 19, the European Commission adopted nine technical standards which clarify certain aspects of Regulation 648/2012 on OTC derivatives, central counterparties (CCPs) and trade repositories (generally known as the European Markets Infrastructure Regulation or EMIR). The technical standards provide clarity in regard to the European rules for the mandatory clearing and reporting of OTC derivatives transactions.

The technical standards that have been adopted relate to:

  • Indirect clearing arrangements;
  • The clearing obligation procedure;
  • The public register;
  • Access to a trading venue;
  • Non-financial counterparties;
  • Risk mitigation techniques for OTC derivatives contracts not cleared by a central counterparty (CCP);
  • The specification of the provisions in legislation that relate to the requirements for CCPs;
  • The capital, retained earnings and reserves of a CCP;
  • The format of the records to be maintained by a CCP;
  • The specification of the provisions in legislation that related to the minimum details of the data to be reported to trade repositories;
  • The details of the application for registration as a trade repository;
  • Data to be published and made available by trade repositories;
  • Operational standards for aggregating, comparing and accessing the data published by trade repositories;
  • The specification of the format and frequency of trade reports to trade repositories; and
  • The format of applications for registration of trade repositories.

The standards will come into force 20 days after their publication in the Official Journal of the European Union. It is likely that this will be in early February 2013.

The proposed technical standard dealing with colleges of supervisors for CCPs has not been adopted. This will be redrafted by the European Securities and Markets Authority for adoption by the European Commission at a later stage.

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