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On April 4, two Commission Implementing Decisions (Amending Decisions) were published in the Official Journal of the European Union, amending the following December 20, 2018 equivalence decisions (Equivalence Decisions):

  • Implementing Decision (EU) 2018/2031, on the temporary equivalence of the UK’s regulatory framework for central counterparties (CCPs); and
  • Implementing Decision (EU) 2018/2030, on the temporary equivalence of the UK’s regulatory framework for central securities depositories (CSDs).

Continue Reading Equivalence for UK CCPs and CSDs Extended

On March 28, the European Securities and Markets Association (ESMA) published a statement updating market participants on its preparations for the United Kingdom’s withdrawal from the European Union, in the event of an agreement on transitional arrangements (Withdrawal Agreement) not being in place (No-Deal Brexit). ESMA’s update follows the European Council’s (EC’s) agreement to the UK government’s request to extend the United Kingdom’s withdrawal from the European Union (Brexit) to either April 12 if the House of Commons does not approve a Withdrawal Agreement by March 29, or to May 22 if it does.
Continue Reading ESMA Publishes Statement on Preparations Regarding Clearing and Settlement for a No-Deal Brexit

On February 18, the European Securities and Markets Authority (ESMA) published a press release confirming that it has adopted recognition decisions to permit three UK central counterparties (CCPs) to continue to provide CCP services to EU trading venues and EU clearing members following the United Kingdom’s withdrawal from the European Union on March 29 (Exit Day) in the event that no agreement on transitional arrangements is in place with the EU (no-deal Brexit).
Continue Reading ESMA to Recognize Three UK CCPs in the Event of a No-Deal Brexit

On June 12, the European Parliament (EP) issued a press release announcing its adoption in plenary of the proposed regulation to amend the European Market Infrastructure Regulation (EMIR) in respect of, among others, clearing, reporting and risk-mitigation techniques for over-the-counter derivatives contracts not cleared by a central counterparty (CCP).
Continue Reading European Parliament Adopts EMIR 2.1 Proposal

On September 22, the European Commission adopted two delegated regulations to implement new EU-wide rules on “indirect clearing arrangements” for the exchange-traded derivatives market (ETD Delegated Regulation) and for the over-the-counter (OTC) derivatives market (OTC Delegated Regulation). The term “indirect clearing arrangement” refers to a set of relationships—also called a “chain”—where at least two intermediaries are interposed between an end-client and the relevant central counterparty (CCP). The most basic indirect clearing chain, therefore, involves the following four entities: the CCP; a clearing member of the CCP (Clearing Member); the client of the Clearing Member that is itself an intermediary (Direct Client); and the client of such Direct Client (Indirect Client). Longer chains are permitted in certain limited circumstances. The OTC Delegated Regulation amends earlier indirect clearing rules for the OTC derivatives market in order to ensure that the provisions of the ETD Delegated Regulation and the OTC Delegated Regulation are identical.
Continue Reading European Commission Adopts Final Rules on Indirect Clearing

On May 4, the European Commission (EC) proposed reforms (Proposal) to the European Market Infrastructure Regulation (EMIR). The Proposal aims to provide simpler and more proportionate rules for over-the-counter (OTC) derivatives to reduce costs and regulatory burdens for market participants without compromising financial stability.
Continue Reading European Commission Proposes Reforms to EMIR

On April 11, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediate Oversight (DSIO) made publicly available No-Action Letter No. 16-88. This letter grants no-action relief to a futures commission merchant (FCM) intending to deposit customer-owned securities in an individual client account (ISA) with a United Kingdom affiliate (Affiliate) for purposes of margining such customers’ foreign futures or foreign options positions executed on a foreign board of trade located in the UK and cleared through a clearing organization that (1) is a central counterparty (CCP) that has received a recognition order as a recognized clearing house (RCH) and is subject to supervision by the Bank of England under Part 18 of the Financial Services and Markets Act 2000; and (2) has been authorized as a CCP pursuant to Article 17 of Regulation (EU) No 648/2012 of the European Parliament and the July 4, 2012 Council on OTC derivatives, central counterparties and trade repositories (an EU CCP).
Continue Reading CFTC Releases No-Action Letter Regarding the Transfer of Customer-Owned Securities by FCMs to Foreign Brokers

On November 15, the European Securities and Markets Authority (ESMA) published an opinion (Opinion) under the European Market Infrastructure Regulation (EMIR). The Opinion is designed to promote a common supervisory approach in relation to: (1) new products and services offered by central counterparties (CCP) that require regulatory approval under Article 15 of EMIR; and (2) the meaning of “significant changes” under Article 49 of EMIR. 
Continue Reading ESMA Publishes Opinion Under EMIR