On March 1, the European Commission (EC) adopted new rules in the form of a delegated regulation (Delegated Regulation) to impose clearing obligations on certain index credit default swaps (CDSs). The contracts captured by the Delegated Regulation include euro-denominated, untranched, five-year iTraxx Europe Main and iTraxx Europe Crossover index CDS, from version 17 onwards.

Under the European Market Infrastructure Regulation (EMIR), the European Securities and Markets Authority (ESMA) is required to propose classes of over-the-counter derivatives that should be subject to mandatory clearing. Further to this requirement, ESMA adopted draft regulatory technical standards for CDSs and submitted them to the EC on October 1, 2015. The Delegated Regulation will be subject to review by the European Parliament and Council and will go into effect on the 20th day following publication in the Official Journal of the European Union.

For further details on the clearing obligations under EMIR, see the Corporate & Financial Weekly Digest edition of December 4, 2015 and August 7, 2015.

A copy of the Delegated Regulation can be found here and its Annex here.

The EC’s accompanying press release can be found here.