Securities Supervision

ESMA publishes consultation paper on the future regulation of OTC derivatives

The new regulation on OTC derivatives, CCPs and Trade Repositories comes into effect on 16th August 2012. Step by step, standardized, non-exchange traded OTC (“over the counter”) derivatives are to become subject of centralized clearing obligations. This regulation is directly enforceable, without any national legal assessment. In order to raise transparency, any derivative contract must be reported to a transaction register. The European Securities and Markets Authority (ESMA) has drafted extensive regulations regarding the implementation across the EU Member States.

Compared to former plans of the European Securities and Markets Authority the scope of reporting duties has considerably increased. Particularly, contracting parties are obliged to value risks associated with derivative activity and report its valuation to the transaction register on a daily basis. The GDV has questioned whether this reporting assessment generally is in line with Article 9 of the regulation on OTC derivatives.

Furthermore, the GDV expressed its support for exceptional regulations regarding centralized clearing and risk mitigation procedures that enable and facilitate non-cleared transactions within insurance groups (“intra-group”).

Finally, the GDV supports the negotiations ESMA is carrying out with the US Commodity Futures and Trading Commission (CTFC) in order to gain acceptance for the European regulation on OTC derivatives as an equivalent regulatory regime.

The GDV’s complete position paper is available in the download section.


pdf image

on ESMA Consultation paper on Draft Technical Standards for the Regulation on OTC Derivatives, CCPs and Trade Repositories